The WACC of Domo Inc (DOMO) is 8.2%.
Range | Selected | |
Cost of equity | 6.7% - 9.8% | 8.25% |
Tax rate | 0.9% - 1.3% | 1.1% |
Cost of debt | 7.0% - 9.5% | 8.25% |
WACC | 6.8% - 9.7% | 8.2% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 4.6% | 5.6% |
Adjusted beta | 0.62 | 0.88 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 6.7% | 9.8% |
Tax rate | 0.9% | 1.3% |
Debt/Equity ratio | 0.22 | 0.22 |
Cost of debt | 7.0% | 9.5% |
After-tax WACC | 6.8% | 9.7% |
Selected WACC | 8.2% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
DOMO | Domo Inc | 0.22 | 1.81 | 1.49 |
CGNT | Cognyte Software Ltd | 0 | 0.17 | 0.17 |
ECOM | ChannelAdvisor Corp | 0 | 0.41 | 0.41 |
FUBO | Fubotv Inc | 0.28 | -0.98 | -0.77 |
IDEX | Ideanomics Inc | 406.14 | 0.04 | 0 |
MTLS | Materialise NV | 0.15 | 1.13 | 0.99 |
OPRA | Opera Ltd | 0.01 | 1.55 | 1.54 |
PRO | Pros Holdings Inc | 0.38 | 1.43 | 1.04 |
RMNI | Rimini Street Inc | 0.25 | 0.57 | 0.46 |
UPLD | Upland Software Inc | 5.79 | 1.89 | 0.28 |
Low | High | |
Unlevered beta | 0.36 | 0.67 |
Relevered beta | 0.43 | 0.82 |
Adjusted relevered beta | 0.62 | 0.88 |
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.