KERN WACC - Weighted Average Cost of Capital
The WACC of Akerna Corp (KERN) is 7.0%.
| Range | Selected | |
| Cost of equity | 5.8% - 8.6% | 7.2% |
| Tax rate | 0.1% - 0.6% | 0.35% |
| Cost of debt | 7.0% - 7.0% | 7% |
| WACC | 6.8% - 7.3% | 7.0% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.42 | 0.66 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.8% | 8.6% |
| Tax rate | 0.1% | 0.6% |
| Debt/Equity ratio | 4.5 | 4.5 |
| Cost of debt | 7.0% | 7.0% |
| After-tax WACC | 6.8% | 7.3% |
| Selected WACC | 7.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| KERN | Akerna Corp | 4.5 | -0.26 | -0.05 |
| CLGX | Corelogic Inc | 0.32 | 1.14 | 0.87 |
| CSGP | CoStar Group Inc | 0.03 | 0.71 | 0.69 |
| DCAC | Daniels Corporate Advisory Company Inc | 1048.17 | 0 | 0 |
| INNI | Innovaro Inc | 31.46 | 2.04 | 0.06 |
| PCMC | Public Company Management Corp | 0.04 | 0.58 | 0.56 |
| QPRC | Quest Patent Research Corp | 26.08 | -0.33 | -0.01 |
| SGSI | Spectrum Global Solutions Inc | 0.54 | -0.77 | -0.5 |
| WFCF | Where Food Comes From Inc | 0 | 0.04 | 0.04 |
| ME.ST | Modern Ekonomi Sverige Holding AB (publ) | 0.07 | 0.16 | 0.15 |
| Low | High | |
| Unlevered beta | 0.02 | 0.1 |
| Relevered beta | 0.13 | 0.49 |
| Adjusted relevered beta | 0.42 | 0.66 |
KERN'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 KERN:
cost_of_equity (7.20%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.42) + 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.