IDT WACC - Weighted Average Cost of Capital
The WACC of IDT Corp (IDT) is 4.8%.
| Range | Selected | |
| Cost of equity | 5.4% - 6.7% | 6.05% |
| Tax rate | 19.3% - 23.3% | 21.3% |
| Cost of debt | 4.5% - 4.5% | 4.5% |
| WACC | 4.5% - 5.1% | 4.8% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.33 | 0.34 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.4% | 6.7% |
| Tax rate | 19.3% | 23.3% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 4.5% | 4.5% |
| After-tax WACC | 4.5% | 5.1% |
| Selected WACC | 4.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| IDT | IDT Corp | 0.95 | 0.65 | 0.37 |
| ADYA.V | Adya Inc | 0.2 | -1.42 | -1.23 |
| ALSK | Alaska Communications Systems Group Inc | 0.91 | 1.48 | 0.86 |
| ATNI | ATN International Inc | 2.48 | 0.57 | 0.19 |
| CBB | Cincinnati Bell Inc | 2.5 | 0.36 | 0.12 |
| CNSL | Consolidated Communications Holdings Inc | 3.85 | -0.01 | 0 |
| CVST | Covista Communications Inc | 98.66 | 0 | 0 |
| IGLDF | Internet Gold Golden Lines Ltd | 46.76 | 0.51 | 0.01 |
| LICT | LICT Corp | 0.24 | -0.02 | -0.02 |
| NTLK | Net Talk.com Inc | 25258.92 | 0 | 0 |
| NUVR | Nuvera Communications Inc | 2.62 | -0.02 | -0.01 |
| Low | High | |
| Unlevered beta | 0 | 0.01 |
| Relevered beta | 0 | 0.01 |
| Adjusted relevered beta | 0.33 | 0.34 |
IDT'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 IDT:
cost_of_equity (6.05%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.33) + 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.