The WACC of LightPath Technologies Inc (LPTH) is 7.0%.
Range | Selected | |
Cost of equity | 5.7% - 8.3% | 7% |
Tax rate | 21.7% - 35.8% | 28.75% |
Cost of debt | 4.6% - 7.0% | 5.8% |
WACC | 5.7% - 8.3% | 7.0% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 4.6% | 5.6% |
Adjusted beta | 0.39 | 0.61 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 5.7% | 8.3% |
Tax rate | 21.7% | 35.8% |
Debt/Equity ratio | 0.01 | 0.01 |
Cost of debt | 4.6% | 7.0% |
After-tax WACC | 5.7% | 8.3% |
Selected WACC | 7.0% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
LPTH | LightPath Technologies Inc | 0.01 | 1.1 | 1.1 |
BNSO | Bonso Electronics International Inc | 0.23 | 0.55 | 0.48 |
DGLY | Digital Ally Inc | 2.08 | 1.69 | 0.7 |
IMTE | Integrated Media Technology Ltd | 1.97 | -0.86 | -0.37 |
LCTC | Lifeloc Technologies Inc | 0.21 | 0.16 | 0.14 |
PNG.V | Kraken Robotics Inc | 0.02 | 1.5 | 1.48 |
SMIT | Schmitt Industries Inc | 35.7 | 0.89 | 0.04 |
TNLX | Trans Lux Corp | 1.31 | -0.77 | -0.41 |
TRCK | Track Group Inc | 13.89 | 0.34 | 0.03 |
VOTI.V | VOTI Detection Inc | 3.37 | 1.6 | 0.49 |
Low | High | |
Unlevered beta | 0.1 | 0.48 |
Relevered beta | 0.09 | 0.42 |
Adjusted relevered beta | 0.39 | 0.61 |
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 LPTH:
cost_of_equity (7.00%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.39) + 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.