DZSI
DZS Inc
Price:  
0.52 
USD
Volume:  
2,351,576
United States | Communications Equipment

DZSI WACC - Weighted Average Cost of Capital

The WACC of DZS Inc (DZSI) is 8.4%.

The Cost of Equity of DZS Inc (DZSI) is 1060.15%.
The Cost of Debt of DZS Inc (DZSI) is 7%.

RangeSelected
Cost of equity628.9% - 1491.4%1060.15%
Tax rate8.4% - 13.2%10.8%
Cost of debt7.0% - 7.0%7%
WACC7.7% - 9.2%8.4%
WACC

DZSI WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta135.88265.45
Additional risk adjustments0.0%0.5%
Cost of equity628.9%1491.4%
Tax rate8.4%13.2%
Debt/Equity ratio
479.51479.51
Cost of debt7.0%7.0%
After-tax WACC7.7%9.2%
Selected WACC8.4%

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.