DIOD WACC - Weighted Average Cost of Capital
The WACC of Diodes Inc (DIOD) is 9.5%.
| Range | Selected | |
| Cost of equity | 8.2% - 11.0% | 9.6% |
| Tax rate | 17.3% - 18.1% | 17.7% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 8.1% - 10.8% | 9.5% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.94 | 1.1 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.2% | 11.0% |
| Tax rate | 17.3% | 18.1% |
| Debt/Equity ratio | 0.02 | 0.02 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 8.1% | 10.8% |
| Selected WACC | 9.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| DIOD | Diodes Inc | 0.02 | 1.79 | 1.75 |
| DSPG | Dsp Group Inc | 0 | 0.9 | 0.9 |
| IPHI | Inphi Corp | 0.05 | 0.93 | 0.89 |
| JKS | JinkoSolar Holding Co Ltd | 7.66 | 0.67 | 0.09 |
| MAXN | Maxeon Solar Technologies Ltd | 7.41 | 0.48 | 0.07 |
| MTSI | MACOM Technology Solutions Holdings Inc | 0.05 | 1.78 | 1.7 |
| MX | MagnaChip Semiconductor Corp | 0.21 | 1.69 | 1.44 |
| NPTN | NeoPhotonics Corp | 0.05 | 0.75 | 0.72 |
| SPWR | SunPower Corp | 0.45 | 1.25 | 0.91 |
| SYNA | Synaptics Inc | 0.42 | 1.98 | 1.47 |
| Low | High | |
| Unlevered beta | 0.89 | 1.13 |
| Relevered beta | 0.91 | 1.15 |
| Adjusted relevered beta | 0.94 | 1.1 |
DIOD'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 DIOD:
cost_of_equity (9.60%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.94) + 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.