FTCI
FTC Solar Inc
Price:  
3.30 
USD
Volume:  
90,859.00
United States | Electrical Equipment
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FTCI WACC - Weighted Average Cost of Capital

The WACC of FTC Solar Inc (FTCI) is 9.4%.

The Cost of Equity of FTC Solar Inc (FTCI) is 9.95%.
The Cost of Debt of FTC Solar Inc (FTCI) is 7.00%.

Range Selected
Cost of equity 8.70% - 11.20% 9.95%
Tax rate 0.40% - 0.50% 0.45%
Cost of debt 7.00% - 7.00% 7.00%
WACC 8.4% - 10.4% 9.4%
WACC

FTCI WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.06 1.14
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.70% 11.20%
Tax rate 0.40% 0.50%
Debt/Equity ratio 0.23 0.23
Cost of debt 7.00% 7.00%
After-tax WACC 8.4% 10.4%
Selected WACC 9.4%

FTCI'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 FTCI:

cost_of_equity (9.95%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.06) + 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.