The WACC of KLDiscovery Inc (KLDI) is 3890.9%.
| Range | Selected | |
| Cost of equity | 253.50% - 376.00% | 314.75% |
| Tax rate | 1.60% - 2.70% | 2.15% |
| Cost of debt | 23.90% - 8,055.90% | 4,039.90% |
| WACC | 25.9% - 7756.0% | 3890.9% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 54.26 | 66.28 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 253.50% | 376.00% |
| Tax rate | 1.60% | 2.70% |
| Debt/Equity ratio | 93.28 | 93.28 |
| Cost of debt | 23.90% | 8,055.90% |
| After-tax WACC | 25.9% | 7756.0% |
| Selected WACC | 3890.9% | |
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 (314.75%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (54.26) + 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.