EGAN
eGain Corp
Price:  
6.25 
USD
Volume:  
62,855.00
United States | Software
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EGAN WACC - Weighted Average Cost of Capital

The WACC of eGain Corp (EGAN) is 8.1%.

The Cost of Equity of eGain Corp (EGAN) is 12.25%.
The Cost of Debt of eGain Corp (EGAN) is 5.00%.

Range Selected
Cost of equity 10.30% - 14.20% 12.25%
Tax rate 15.90% - 26.80% 21.35%
Cost of debt 5.00% - 5.00% 5.00%
WACC 7.2% - 8.9% 8.1%
WACC

EGAN WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.39 1.66
Additional risk adjustments 0.0% 0.5%
Cost of equity 10.30% 14.20%
Tax rate 15.90% 26.80%
Debt/Equity ratio 1 1
Cost of debt 5.00% 5.00%
After-tax WACC 7.2% 8.9%
Selected WACC 8.1%

EGAN'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 EGAN:

cost_of_equity (12.25%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.39) + 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.