OCC
Optical Cable Corp
Price:  
3.6 
USD
Volume:  
68,778
United States | Communications Equipment

OCC WACC - Weighted Average Cost of Capital

The WACC of Optical Cable Corp (OCC) is 8.8%.

The Cost of Equity of Optical Cable Corp (OCC) is 9.6%.
The Cost of Debt of Optical Cable Corp (OCC) is 7.3%.

RangeSelected
Cost of equity7.9% - 11.3%9.6%
Tax rate0.4% - 2.8%1.6%
Cost of debt7.0% - 7.6%7.3%
WACC7.6% - 10.1%8.8%
WACC

OCC WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta0.871.15
Additional risk adjustments0.0%0.5%
Cost of equity7.9%11.3%
Tax rate0.4%2.8%
Debt/Equity ratio
0.460.46
Cost of debt7.0%7.6%
After-tax WACC7.6%10.1%
Selected WACC8.8%

OCC'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 OCC:

cost_of_equity (9.60%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.87) + 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.