ELSE
Electro-Sensors Inc
Price:  
4.15 
USD
Volume:  
3,204.00
United States | Electronic Equipment, Instruments & Components
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ELSE WACC - Weighted Average Cost of Capital

The WACC of Electro-Sensors Inc (ELSE) is 5.4%.

The Cost of Equity of Electro-Sensors Inc (ELSE) is 7.10%.
The Cost of Debt of Electro-Sensors Inc (ELSE) is 5.00%.

Range Selected
Cost of equity 5.50% - 8.70% 7.10%
Tax rate 20.70% - 28.10% 24.40%
Cost of debt 5.00% - 5.00% 5.00%
WACC 4.7% - 6.2% 5.4%
WACC

ELSE WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.35 0.69
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.50% 8.70%
Tax rate 20.70% 28.10%
Debt/Equity ratio 1 1
Cost of debt 5.00% 5.00%
After-tax WACC 4.7% 6.2%
Selected WACC 5.4%

ELSE'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 ELSE:

cost_of_equity (7.10%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.35) + 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.