OSAT WACC - Weighted Average Cost of Capital
The WACC of Orbsat Corp (OSAT) is 7.2%.
| Range | Selected | |
| Cost of equity | 5.4% - 8.9% | 7.15% |
| Tax rate | 0.0% - 0.3% | 0.15% |
| Cost of debt | 7.0% - 7.0% | 7% |
| WACC | 5.5% - 8.9% | 7.2% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 4.2% | 5.2% |
| Adjusted beta | 0.42 | 0.81 |
| Additional risk adjustments | 0.5% | 1.0% |
| Cost of equity | 5.4% | 8.9% |
| Tax rate | 0.0% | 0.3% |
| Debt/Equity ratio | 0.03 | 0.03 |
| Cost of debt | 7.0% | 7.0% |
| After-tax WACC | 5.5% | 8.9% |
| Selected WACC | 7.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| OSAT | Orbsat Corp | 0.03 | 2.95 | 2.87 |
| ABWN | Airborne Wireless Network | 200.76 | -2.32 | -0.01 |
| CCOI | Cogent Communications Holdings Inc | 0.82 | 0.36 | 0.2 |
| DTGI | Digerati Technologies Inc | 24.99 | 0.57 | 0.02 |
| FUIG | Fusion Interactive Corp | 1053.12 | -1.09 | 0 |
| INTEQ | Intelsat SA | 2643.91 | -2.06 | 0 |
| PVSP | Pervasip Corp | 4.79 | 0.93 | 0.16 |
| SIFY | Sify Technologies Ltd | 1.02 | 0.03 | 0.02 |
| TWER | Towerstream Corp | 10086.42 | 4129.88 | 0.41 |
| USNL | US National Telecom Inc | 0 | 144.91 | 144.65 |
| Low | High | |
| Unlevered beta | 0.02 | 0.18 |
| Relevered beta | 0.13 | 0.72 |
| Adjusted relevered beta | 0.42 | 0.81 |
OSAT'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 OSAT:
cost_of_equity (7.15%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (0.42) + risk_adjustments (0.75%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.