JNPR WACC - Weighted Average Cost of Capital
The WACC of Juniper Networks Inc (JNPR) is 8.2%.
| Range | Selected | |
| Cost of equity | 7.4% - 10.1% | 8.75% |
| Tax rate | 6.1% - 9.5% | 7.8% |
| Cost of debt | 4.3% - 5.1% | 4.7% |
| WACC | 7.0% - 9.4% | 8.2% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.77 | 0.93 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.4% | 10.1% |
| Tax rate | 6.1% | 9.5% |
| Debt/Equity ratio | 0.13 | 0.13 |
| Cost of debt | 4.3% | 5.1% |
| After-tax WACC | 7.0% | 9.4% |
| Selected WACC | 8.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| JNPR | Juniper Networks Inc | 0.13 | 0.4 | 0.35 |
| CIEN | Ciena Corp | 0.14 | 1.95 | 1.73 |
| CMTL | Comtech Telecommunications Corp | 2.62 | 1.52 | 0.45 |
| COMM | CommScope Holding Company Inc | 7.48 | 2.02 | 0.26 |
| EXTR | Extreme Networks Inc | 0.09 | 1.92 | 1.77 |
| INFN | Infinera Corp | 0.42 | 0.94 | 0.68 |
| PLT | Plantronics Inc | 1.46 | 1.9 | 0.81 |
| RBBN | Ribbon Communications Inc | 0.55 | 1.69 | 1.13 |
| SATS | EchoStar Corp | 4.7 | 1.03 | 0.19 |
| VIAV | Viavi Solutions Inc | 0.32 | 1.01 | 0.78 |
| Low | High | |
| Unlevered beta | 0.58 | 0.79 |
| Relevered beta | 0.66 | 0.9 |
| Adjusted relevered beta | 0.77 | 0.93 |
JNPR'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 JNPR:
cost_of_equity (8.75%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.77) + 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.