DAKT
Daktronics Inc
Price:  
16.90 
USD
Volume:  
509,956.00
United States | Electronic Equipment, Instruments & Components
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DAKT WACC - Weighted Average Cost of Capital

The WACC of Daktronics Inc (DAKT) is 9.9%.

The Cost of Equity of Daktronics Inc (DAKT) is 10.30%.
The Cost of Debt of Daktronics Inc (DAKT) is 7.00%.

Range Selected
Cost of equity 8.90% - 11.70% 10.30%
Tax rate 41.70% - 46.80% 44.25%
Cost of debt 7.00% - 7.00% 7.00%
WACC 8.6% - 11.2% 9.9%
WACC

DAKT WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.1 1.22
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.90% 11.70%
Tax rate 41.70% 46.80%
Debt/Equity ratio 0.06 0.06
Cost of debt 7.00% 7.00%
After-tax WACC 8.6% 11.2%
Selected WACC 9.9%

DAKT's CAPM model and how its cost of Equity is calculated

The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.

This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.

Here’s how we figure out the cost of equity for DAKT:

cost_of_equity (10.30%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.1) + risk_adjustments (0.25%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.