The WACC of Gty Technology Holdings Inc (GTYH) is 6.8%.
Range | Selected | |
Cost of equity | 5.4% - 8.3% | 6.85% |
Tax rate | 1.0% - 3.1% | 2.05% |
Cost of debt | 7.0% - 7.0% | 7% |
WACC | 5.5% - 8.2% | 6.8% |
Category | Low | High |
Long-term bond rate | 3.2% | 3.7% |
Equity market risk premium | 4.2% | 5.2% |
Adjusted beta | 0.53 | 0.78 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 5.4% | 8.3% |
Tax rate | 1.0% | 3.1% |
Debt/Equity ratio | 0.07 | 0.07 |
Cost of debt | 7.0% | 7.0% |
After-tax WACC | 5.5% | 8.2% |
Selected WACC | 6.8% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
GTYH | Gty Technology Holdings Inc | 0.07 | -0.41 | -0.39 |
AEYE | AudioEye Inc | 0.05 | 2.68 | 2.56 |
ASUR | Asure Software Inc | 0.05 | 0.81 | 0.78 |
MCLD.V | mCloud Technologies Corp | 4.99 | -1.29 | -0.22 |
OPT.TO | Optiva Inc | 12.03 | 0.81 | 0.06 |
PFM.V | ProntoForms Corp | 0.09 | -1.24 | -1.15 |
QUMU | Qumu Corp | 0.01 | 1.41 | 1.4 |
SITOQ | SITO Mobile Ltd | 0.46 | -15.62 | -10.72 |
SKKY | Skkynet Cloud Systems Inc | 0.81 | -0.6 | -0.34 |
SOFO | Sonic Foundry Inc | 9188.26 | -23.73 | 0 |
Low | High | |
Unlevered beta | -0.27 | 0.02 |
Relevered beta | 0.3 | 0.67 |
Adjusted relevered beta | 0.53 | 0.78 |
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 GTYH:
cost_of_equity (6.85%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (0.53) + 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.