LTRX WACC - Weighted Average Cost of Capital
The WACC of Lantronix Inc (LTRX) is 8.6%.
| Range | Selected | |
| Cost of equity | 6.9% - 9.5% | 8.2% |
| Tax rate | 7.2% - 13.0% | 10.1% |
| Cost of debt | 7.0% - 16.1% | 11.55% |
| WACC | 6.8% - 10.3% | 8.6% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.66 | 0.84 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.9% | 9.5% |
| Tax rate | 7.2% | 13.0% |
| Debt/Equity ratio | 0.2 | 0.2 |
| Cost of debt | 7.0% | 16.1% |
| After-tax WACC | 6.8% | 10.3% |
| Selected WACC | 8.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| LTRX | Lantronix Inc | 0.2 | 0.71 | 0.6 |
| BDR | Blonder Tongue Laboratories Inc | 0.99 | 0.65 | 0.34 |
| CMI.V | C-Com Satellite Systems Inc | 0.04 | 0.88 | 0.86 |
| GNSS | Genasys Inc | 0.16 | 1.3 | 1.13 |
| LTE.V | Lite Access Technologies Inc | 0.08 | -0.1 | -0.09 |
| OCC | Optical Cable Corp | 0.48 | 1.14 | 0.79 |
| PCTI | PCTEL Inc | 0 | -0.35 | -0.35 |
| VCM.TO | Vecima Networks Inc | 0.28 | 0.59 | 0.47 |
| XCOMQ | Xtera Communications Inc | 745644.6 | -1.16 | 0 |
| YTY.V | Wi2wi Corp | 0.97 | 1.31 | 0.7 |
| Low | High | |
| Unlevered beta | 0.42 | 0.64 |
| Relevered beta | 0.49 | 0.76 |
| Adjusted relevered beta | 0.66 | 0.84 |
LTRX'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 LTRX:
cost_of_equity (8.20%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.66) + 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.