SEV.V WACC - Weighted Average Cost of Capital
The WACC of Spectra7 Microsystems Inc (SEV.V) is 7.1%.
| Range | Selected | |
| Cost of equity | 12.3% - 20.5% | 16.4% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 7.0% - 8.6% | 7.8% |
| WACC | 6.1% - 8.1% | 7.1% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 1.65 | 2.57 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 12.3% | 20.5% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 6.96 | 6.96 |
| Cost of debt | 7.0% | 8.6% |
| After-tax WACC | 6.1% | 8.1% |
| Selected WACC | 7.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| SEV.V | Spectra7 Microsystems Inc | 6.96 | 0.94 | 0.15 |
| ASTI | Ascent Solar Technologies Inc | 0.01 | 0.34 | 0.34 |
| EMAN | eMagin Corp | 0.09 | 1.49 | 1.39 |
| LEDS | SemiLEDs Corp | 0.15 | 0.69 | 0.62 |
| NPTN | NeoPhotonics Corp | 0.05 | 0.75 | 0.72 |
| PTK.V | POET Technologies Inc | 0 | 0.3 | 0.3 |
| QNC.V | Quantum Numbers Corp | 0 | -0.02 | -0.02 |
| QUIK | QuickLogic Corp | 0.26 | 1.97 | 1.66 |
| SODI | Solitron Devices Inc | 0.14 | 0.04 | 0.04 |
| SQNS | Sequans Communications SA | 0.25 | 1.13 | 0.95 |
| Low | High | |
| Unlevered beta | 0.32 | 0.66 |
| Relevered beta | 1.97 | 3.34 |
| Adjusted relevered beta | 1.65 | 2.57 |
SEV.V'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 SEV.V:
cost_of_equity (16.40%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (1.65) + 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.