INRD WACC - Weighted Average Cost of Capital
The WACC of Inrad Optics Inc (INRD) is 8.6%.
| Range | Selected | |
| Cost of equity | 6.6% - 12.0% | 9.3% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 4.6% - 6.3% | 5.45% |
| WACC | 6.2% - 11.0% | 8.6% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.59 | 1.27 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.6% | 12.0% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 0.15 | 0.15 |
| Cost of debt | 4.6% | 6.3% |
| After-tax WACC | 6.2% | 11.0% |
| Selected WACC | 8.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| INRD | Inrad Optics Inc | 0.15 | -0.59 | -0.53 |
| APH | Amphenol Corp | 0.06 | 1.71 | 1.64 |
| CVAT | Cavitation Technologies Inc | 0.02 | -0.28 | -0.28 |
| DYSL | Dynasil Corporation of America | 0.22 | 0.06 | 0.05 |
| GLW | Corning Inc | 0.16 | 1.35 | 1.21 |
| LFUS | Littelfuse Inc | 0.15 | 1.77 | 1.59 |
| MPAD | Micropac Industries Inc | 0.31 | 0.68 | 0.56 |
| VSH | Vishay Intertechnology Inc | 0.42 | 1.84 | 1.41 |
| YNV.V | Ynvisible Interactive Inc | 0.01 | 1.35 | 1.34 |
| ZTE.CN | Ztest Electronics Inc | 0.04 | -0.03 | -0.03 |
| Low | High | |
| Unlevered beta | 0.35 | 1.26 |
| Relevered beta | 0.39 | 1.4 |
| Adjusted relevered beta | 0.59 | 1.27 |
INRD'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 INRD:
cost_of_equity (9.30%) = 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.