ETWO
E2open Parent Holdings Inc
Price:  
3.25 
USD
Volume:  
5,684,687.00
United States | Software
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ETWO WACC - Weighted Average Cost of Capital

The WACC of E2open Parent Holdings Inc (ETWO) is 12.4%.

The Cost of Equity of E2open Parent Holdings Inc (ETWO) is 12.70%.
The Cost of Debt of E2open Parent Holdings Inc (ETWO) is 14.25%.

Range Selected
Cost of equity 10.80% - 14.60% 12.70%
Tax rate 10.80% - 15.10% 12.95%
Cost of debt 4.60% - 23.90% 14.25%
WACC 7.4% - 17.5% 12.4%
WACC

ETWO WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.51 1.73
Additional risk adjustments 0.0% 0.5%
Cost of equity 10.80% 14.60%
Tax rate 10.80% 15.10%
Debt/Equity ratio 1.04 1.04
Cost of debt 4.60% 23.90%
After-tax WACC 7.4% 17.5%
Selected WACC 12.4%

ETWO'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 ETWO:

cost_of_equity (12.70%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.51) + 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.