PRTS
Carparts.Com Inc
Price:  
0.82 
USD
Volume:  
576,555.00
United States | Internet & Direct Marketing Retail
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Carparts.Com WACC - Weighted Average Cost of Capital

The WACC of Carparts.Com Inc (PRTS) is 9.2%.

The Cost of Equity of Carparts.Com Inc (PRTS) is 10.00%.
The Cost of Debt of Carparts.Com Inc (PRTS) is 7.35%.

Range Selected
Cost of equity 7.20% - 12.80% 10.00%
Tax rate 3.10% - 12.40% 7.75%
Cost of debt 7.00% - 7.70% 7.35%
WACC 7.1% - 11.4% 9.2%
WACC

Carparts.Com WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.72 1.41
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.20% 12.80%
Tax rate 3.10% 12.40%
Debt/Equity ratio 0.29 0.29
Cost of debt 7.00% 7.70%
After-tax WACC 7.1% 11.4%
Selected WACC 9.2%

Carparts.Com'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 Carparts.Com:

cost_of_equity (10.00%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.72) + 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.