LRN
Stride Inc
Price:  
160.72 
USD
Volume:  
782,291.00
United States | Diversified Consumer Services
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LRN WACC - Weighted Average Cost of Capital

The WACC of Stride Inc (LRN) is 8.7%.

The Cost of Equity of Stride Inc (LRN) is 9.00%.
The Cost of Debt of Stride Inc (LRN) is 4.25%.

Range Selected
Cost of equity 7.80% - 10.20% 9.00%
Tax rate 25.60% - 26.00% 25.80%
Cost of debt 4.00% - 4.50% 4.25%
WACC 7.5% - 9.8% 8.7%
WACC

LRN WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.86 0.96
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.80% 10.20%
Tax rate 25.60% 26.00%
Debt/Equity ratio 0.07 0.07
Cost of debt 4.00% 4.50%
After-tax WACC 7.5% 9.8%
Selected WACC 8.7%

LRN'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 LRN:

cost_of_equity (9.00%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.86) + 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.