The WACC of GoPro Inc (GPRO) is 6.3%.
Range | Selected | |
Cost of equity | 6.6% - 9.7% | 8.15% |
Tax rate | 26.2% - 27.0% | 26.6% |
Cost of debt | 4.0% - 7.0% | 5.5% |
WACC | 5.0% - 7.7% | 6.3% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 4.6% | 5.6% |
Adjusted beta | 0.59 | 0.86 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 6.6% | 9.7% |
Tax rate | 26.2% | 27.0% |
Debt/Equity ratio | 0.79 | 0.79 |
Cost of debt | 4.0% | 7.0% |
After-tax WACC | 5.0% | 7.7% |
Selected WACC | 6.3% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
GPRO | GoPro Inc | 0.79 | 2.03 | 1.29 |
DBO.TO | D-Box Technologies Inc | 0.08 | 0.08 | 0.08 |
GTXO | GTX Corp | 0.6 | 1.22 | 0.85 |
LBAS | Location Based Technologies Inc | 5.52 | -1.26 | -0.25 |
LCUT | Lifetime Brands Inc | 1.83 | 0.55 | 0.24 |
MCZAF | Mad Catz Interactive Inc | 221777.6 | 0 | 0 |
NTZ | Natuzzi SpA | 2.92 | 1.45 | 0.46 |
SMDM | Singing Machine Company Inc | 0.15 | 0.63 | 0.57 |
UEIC | Universal Electronics Inc | 0.44 | 1.31 | 0.99 |
VOXX | VOXX International Corp | 0.46 | 0.34 | 0.26 |
Low | High | |
Unlevered beta | 0.25 | 0.5 |
Relevered beta | 0.39 | 0.79 |
Adjusted relevered beta | 0.59 | 0.86 |
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 GoPro:
cost_of_equity (8.15%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.59) + 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.