SCVX WACC - Weighted Average Cost of Capital
The WACC of SCVX Corp (SCVX) is 7.1%.
| Range | Selected | |
| Cost of equity | 9.2% - 12.0% | 10.6% |
| Tax rate | 27.0% - 27.0% | 27% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.4% - 7.8% | 7.1% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 4.2% | 5.2% |
| Adjusted beta | 1.43 | 1.5 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.2% | 12.0% |
| Tax rate | 27.0% | 27.0% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.4% | 7.8% |
| Selected WACC | 7.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| SCVX | SCVX Corp | 0.82 | 1.04 | 0.65 |
| ACKIU | Ackrell SPAC Partners I Co | 0.01 | 0.99 | 0.98 |
| ACV | Virtus AllianzGI Diversified Income & Convertible Fund | 0.44 | 3.55 | 2.68 |
| CCYC | Clancy Corp | 0 | 3.55 | 3.54 |
| CFAC | CF Finance Acquisition III Corp | 0 | 1.05 | 1.04 |
| CFVIU | CF Acquisition Corp VI | 0 | 0.93 | 0.93 |
| CHN | China Fund Inc | 0 | 3.55 | 3.54 |
| EMF | Templeton Emerging Markets Fund Inc | 0.05 | 3.55 | 3.43 |
| FEI | First Trust MLP and Energy Income Fund | 0.21 | 3.55 | 3.07 |
| NML | Neuberger Berman Mlp and Energy Income Fund Inc | 0.2 | 3.55 | 3.09 |
| Low | High | |
| Unlevered beta | 2.02 | 3.08 |
| Relevered beta | 1.64 | 1.75 |
| Adjusted relevered beta | 1.43 | 1.5 |
SCVX'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 SCVX:
cost_of_equity (10.60%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (1.43) + 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.