MPAD
Micropac Industries Inc
Price:  
19.97 
USD
Volume:  
50.00
United States | Electronic Equipment, Instruments & Components
Valuation
Overview
Financials
Forecast
Compare
Historical Price
SolvencyDividends
Transactions
People

MPAD WACC - Weighted Average Cost of Capital

The WACC of Micropac Industries Inc (MPAD) is 7.4%.

The Cost of Equity of Micropac Industries Inc (MPAD) is 8.45%.
The Cost of Debt of Micropac Industries Inc (MPAD) is 4.80%.

Range Selected
Cost of equity 6.70% - 10.20% 8.45%
Tax rate 17.40% - 19.00% 18.20%
Cost of debt 4.80% - 4.80% 4.80%
WACC 6.0% - 8.7% 7.4%
WACC

MPAD WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.61 0.96
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.70% 10.20%
Tax rate 17.40% 19.00%
Debt/Equity ratio 0.31 0.31
Cost of debt 4.80% 4.80%
After-tax WACC 6.0% 8.7%
Selected WACC 7.4%

MPAD'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 MPAD:

cost_of_equity (8.45%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.61) + 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.