LASR WACC - Weighted Average Cost of Capital
The WACC of nLIGHT Inc (LASR) is 8.7%.
| Range | Selected | |
| Cost of equity | 10.5% - 14.6% | 12.55% |
| Tax rate | 1.0% - 1.4% | 1.2% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 7.7% - 9.8% | 8.7% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.43 | 1.75 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.5% | 14.6% |
| Tax rate | 1.0% | 1.4% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 7.7% | 9.8% |
| Selected WACC | 8.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| LASR | nLIGHT Inc | 1.07 | 1.29 | 0.63 |
| CRAWA | Crawford United Corp | 0.04 | 0.33 | 0.31 |
| DGLY | Digital Ally Inc | 38.12 | 1.66 | 0.04 |
| HOLI | Hollysys Automation Technologies Ltd | 0.02 | 0.62 | 0.6 |
| LPTH | LightPath Technologies Inc | 0.01 | 1.03 | 1.02 |
| MICT | MICT Inc | 0.01 | 1.14 | 1.13 |
| PAR | PAR Technology Corp | 0.13 | 1.52 | 1.35 |
| PHO.TO | Photon Control Inc | 0 | 1.62 | 1.61 |
| RCAT | Red Cat Holdings Inc | 0 | 1.24 | 1.23 |
| TRCK | Track Group Inc | 17.97 | 0.78 | 0.04 |
| VPG | Vishay Precision Group Inc | 0.09 | 1.06 | 0.98 |
| Low | High | |
| Unlevered beta | 0.63 | 1.02 |
| Relevered beta | 1.64 | 2.12 |
| Adjusted relevered beta | 1.43 | 1.75 |
LASR'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 LASR:
cost_of_equity (12.55%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.43) + 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.