EFOI
Energy Focus Inc
Price:  
1.69 
USD
Volume:  
3,456.00
United States | Electrical Equipment
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EFOI WACC - Weighted Average Cost of Capital

The WACC of Energy Focus Inc (EFOI) is 6.9%.

The Cost of Equity of Energy Focus Inc (EFOI) is 6.60%.
The Cost of Debt of Energy Focus Inc (EFOI) is 7.20%.

Range Selected
Cost of equity 5.40% - 7.80% 6.60%
Tax rate -% - 0.10% 0.05%
Cost of debt 7.00% - 7.40% 7.20%
WACC 6.2% - 7.6% 6.9%
WACC

EFOI WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.33 0.52
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.40% 7.80%
Tax rate -% 0.10%
Debt/Equity ratio 1 1
Cost of debt 7.00% 7.40%
After-tax WACC 6.2% 7.6%
Selected WACC 6.9%

EFOI'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 EFOI:

cost_of_equity (6.60%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.33) + 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.