The WACC of LOUD Technologies Inc (LTEC) is 19.8%.
| Range | Selected | |
| Cost of equity | 40,055,278.30% - 62,854,332.00% | 51,454,805.15% |
| Tax rate | 4.20% - 5.70% | 4.95% |
| Cost of debt | 12.70% - 23.90% | 18.30% |
| WACC | 14.1% - 25.5% | 19.8% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 8.70766835e+06 | 1.122398698e+07 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 40,055,278.30% | 62,854,332.00% |
| Tax rate | 4.20% | 5.70% |
| Debt/Equity ratio | 2.092529327e+07 | 2.092529327e+07 |
| Cost of debt | 12.70% | 23.90% |
| After-tax WACC | 14.1% | 25.5% |
| Selected WACC | 19.8% | |
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 LTEC:
cost_of_equity (51,454,805.15%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (8.70766835e+06) + 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.