DZSI WACC - Weighted Average Cost of Capital
The WACC of DZS Inc (DZSI) is 8.4%.
| Range | Selected | |
| Cost of equity | 628.9% - 1491.4% | 1060.15% |
| Tax rate | 8.4% - 13.2% | 10.8% |
| Cost of debt | 7.0% - 7.0% | 7% |
| WACC | 7.7% - 9.2% | 8.4% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 135.88 | 265.45 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 628.9% | 1491.4% |
| Tax rate | 8.4% | 13.2% |
| Debt/Equity ratio | 479.51 | 479.51 |
| Cost of debt | 7.0% | 7.0% |
| After-tax WACC | 7.7% | 9.2% |
| Selected WACC | 8.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| DZSI | DZS Inc | 479.51 | -3.4 | -0.01 |
| AVNW | Aviat Networks Inc | 0.16 | 0.43 | 0.38 |
| CAMP | CalAmp Corp | 0 | 1.72 | 1.71 |
| CASA | Casa Systems Inc | 54.32 | 0.4 | 0.01 |
| CRNT | Ceragon Networks Ltd | 0.12 | 1.18 | 1.07 |
| DGII | Digi International Inc | 0.1 | 1.34 | 1.23 |
| ET.TO | Evertz Technologies Ltd | 0.02 | 0.84 | 0.82 |
| EXF.TO | EXFO Inc | 0.14 | 1.47 | 1.3 |
| PCTI | PCTEL Inc | 0 | -0.35 | -0.35 |
| TESS | TESSCO Technologies Inc | 0.84 | 0.93 | 0.53 |
| XCOMQ | Xtera Communications Inc | 745644.6 | -1.16 | 0 |
| Low | High | |
| Unlevered beta | 0.38 | 0.82 |
| Relevered beta | 202.31 | 395.7 |
| Adjusted relevered beta | 135.88 | 265.45 |
DZSI'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 DZSI:
cost_of_equity (1,060.15%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (135.88) + 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.