ROFO WACC - Weighted Average Cost of Capital
The WACC of Rockford Corp (ROFO) is 7.7%.
| Range | Selected | |
| Cost of equity | 7.7% - 13.0% | 10.35% |
| Tax rate | 0.3% - 0.8% | 0.55% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.4% - 9.0% | 7.7% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 4.2% | 5.2% |
| Adjusted beta | 1.07 | 1.69 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.7% | 13.0% |
| Tax rate | 0.3% | 0.8% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.4% | 9.0% |
| Selected WACC | 7.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| ROFO | Rockford Corp | 0.1 | 0.41 | 0.38 |
| DBO.TO | D-Box Technologies Inc | 0.07 | 0.03 | 0.03 |
| ESYL | Easylink Solutions Corp | 1.54 | -5.45 | -2.16 |
| EXEO | Exeo Entertainment Inc | 6.74 | 2.73 | 0.35 |
| GTXO | GTX Corp | 0.6 | 1.22 | 0.77 |
| MSN | Emerson Radio Corp | 0 | 0.12 | 0.12 |
| NVFY | Nova LifeStyle Inc | 0.05 | 1.9 | 1.82 |
| SMDM | Singing Machine Company Inc | 0.15 | 0.63 | 0.55 |
| VIOT | Viomi Technology Co Ltd | 0.44 | 1.04 | 0.73 |
| ALLEX.PA | Lexibook Linguistic Electronic System SA | 0.21 | 1.04 | 0.87 |
| NBZ.ST | Northbaze Group AB | 0.56 | 0.08 | 0.05 |
| Low | High | |
| Unlevered beta | 0.35 | 0.55 |
| Relevered beta | 1.1 | 2.03 |
| Adjusted relevered beta | 1.07 | 1.69 |
ROFO'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 ROFO:
cost_of_equity (10.35%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (1.07) + 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.