Quantum WACC - Weighted Average Cost of Capital
The WACC of Quantum Corp (QMCO) is 9.2%.
| Range | Selected | |
| Cost of equity | 9.7% - 12.6% | 11.15% |
| Tax rate | 3.2% - 4.6% | 3.9% |
| Cost of debt | 4.9% - 11.8% | 8.35% |
| WACC | 6.6% - 11.8% | 9.2% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.27 | 1.37 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.7% | 12.6% |
| Tax rate | 3.2% | 4.6% |
| Debt/Equity ratio | 1.72 | 1.72 |
| Cost of debt | 4.9% | 11.8% |
| After-tax WACC | 6.6% | 11.8% |
| Selected WACC | 9.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| QMCO | Quantum Corp | 1.72 | 2.16 | 0.82 |
| ALOT | AstroNova Inc | 0.55 | 0.88 | 0.58 |
| CAN | Canaan Inc | 0.02 | 1.2 | 1.18 |
| IGOI | iGO Inc | 0.92 | 0.89 | 0.47 |
| OSS | One Stop Systems Inc | 0.01 | 1.48 | 1.47 |
| OTIVF | On Track Innovations Ltd | 1.95 | 0.81 | 0.28 |
| SCKT | Socket Mobile Inc | 0.42 | 0.8 | 0.57 |
| TACT | TransAct Technologies Inc | 0.08 | 0.66 | 0.61 |
| TTD.V | Tinkerine Studios Ltd | 0.37 | 0.97 | 0.72 |
| VIDE | Video Display Corp | 1215.42 | -0.63 | 0 |
| Low | High | |
| Unlevered beta | 0.57 | 0.65 |
| Relevered beta | 1.4 | 1.55 |
| Adjusted relevered beta | 1.27 | 1.37 |
Quantum'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 Quantum:
cost_of_equity (11.15%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.27) + 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.