LPTH
LightPath Technologies Inc
Price:  
2.44 
USD
Volume:  
100,857.00
United States | Electronic Equipment, Instruments & Components
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LPTH WACC - Weighted Average Cost of Capital

The WACC of LightPath Technologies Inc (LPTH) is 6.8%.

The Cost of Equity of LightPath Technologies Inc (LPTH) is 6.85%.
The Cost of Debt of LightPath Technologies Inc (LPTH) is 5.80%.

Range Selected
Cost of equity 5.60% - 8.10% 6.85%
Tax rate 21.70% - 35.80% 28.75%
Cost of debt 4.60% - 7.00% 5.80%
WACC 5.6% - 8.0% 6.8%
WACC

LPTH WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.38 0.57
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.60% 8.10%
Tax rate 21.70% 35.80%
Debt/Equity ratio 0.01 0.01
Cost of debt 4.60% 7.00%
After-tax WACC 5.6% 8.0%
Selected WACC 6.8%

LPTH'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 LPTH:

cost_of_equity (6.85%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.38) + 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.