The WACC of KLDiscovery Inc (KLDI) is 3771.3%.
| Range | Selected | |
| Cost of equity | 72.30% - 100.10% | 86.20% |
| Tax rate | 1.60% - 2.70% | 2.15% |
| Cost of debt | 23.90% - 8,055.90% | 4,039.90% |
| WACC | 25.5% - 7517.1% | 3771.3% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 14.88 | 17 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 72.30% | 100.10% |
| Tax rate | 1.60% | 2.70% |
| Debt/Equity ratio | 23.32 | 23.32 |
| Cost of debt | 23.90% | 8,055.90% |
| After-tax WACC | 25.5% | 7517.1% |
| Selected WACC | 3771.3% | |
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 KLDI:
cost_of_equity (86.20%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (14.88) + 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.