DOMO
Domo Inc
Price:  
14.54 
USD
Volume:  
736,800
United States | Software

DOMO WACC - Weighted Average Cost of Capital

The WACC of Domo Inc (DOMO) is 8.2%.

The Cost of Equity of Domo Inc (DOMO) is 8.25%.
The Cost of Debt of Domo Inc (DOMO) is 8.25%.

RangeSelected
Cost of equity6.7% - 9.8%8.25%
Tax rate0.9% - 1.3%1.1%
Cost of debt7.0% - 9.5%8.25%
WACC6.8% - 9.7%8.2%
WACC

DOMO WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta0.620.88
Additional risk adjustments0.0%0.5%
Cost of equity6.7%9.8%
Tax rate0.9%1.3%
Debt/Equity ratio
0.220.22
Cost of debt7.0%9.5%
After-tax WACC6.8%9.7%
Selected WACC8.2%

DOMO'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 DOMO:

cost_of_equity (8.25%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.62) + 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.