The WACC of Franklin Wireless Corp (FKWL) is 6.6%.
Range | Selected | |
Cost of equity | 7.2% - 11.2% | 9.2% |
Tax rate | 20.4% - 21.3% | 20.85% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 5.6% - 7.5% | 6.6% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 4.6% | 5.6% |
Adjusted beta | 0.72 | 1.12 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 7.2% | 11.2% |
Tax rate | 20.4% | 21.3% |
Debt/Equity ratio | 1 | 1 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 5.6% | 7.5% |
Selected WACC | 6.6% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
FKWL | Franklin Wireless Corp | 1.11 | -0.06 | -0.03 |
BDR | Blonder Tongue Laboratories Inc | 0.99 | 0.65 | 0.36 |
GNSS | Genasys Inc | 0.15 | 1.43 | 1.28 |
LTE.V | Lite Access Technologies Inc | 0.08 | -0.1 | -0.09 |
LTRX | Lantronix Inc | 0.14 | 0.96 | 0.86 |
OCC | Optical Cable Corp | 0.37 | 1.23 | 0.95 |
PCTI | PCTEL Inc | 0 | -0.35 | -0.35 |
PRKR | ParkerVision Inc | 1.46 | 0.58 | 0.27 |
STC.V | Sangoma Technologies Corp | 0.18 | 1.3 | 1.14 |
VCM.TO | Vecima Networks Inc | 0.3 | 0.66 | 0.53 |
XCOMQ | Xtera Communications Inc | 745644.6 | -1.16 | 0 |
Low | High | |
Unlevered beta | 0.27 | 0.53 |
Relevered beta | 0.58 | 1.18 |
Adjusted relevered beta | 0.72 | 1.12 |
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 FKWL:
cost_of_equity (9.20%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.72) + 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.