SHEN
Shenandoah Telecommunications Co
Price:  
14.58 
USD
Volume:  
312,163
United States | Wireless Telecommunication Services

SHEN WACC - Weighted Average Cost of Capital

The WACC of Shenandoah Telecommunications Co (SHEN) is 5.4%.

The Cost of Equity of Shenandoah Telecommunications Co (SHEN) is 6.2%.
The Cost of Debt of Shenandoah Telecommunications Co (SHEN) is 5.5%.

RangeSelected
Cost of equity5.4% - 7.0%6.2%
Tax rate26.6% - 29.7%28.15%
Cost of debt4.0% - 7.0%5.5%
WACC4.6% - 6.3%5.4%
WACC

SHEN WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta0.330.38
Additional risk adjustments0.0%0.5%
Cost of equity5.4%7.0%
Tax rate26.6%29.7%
Debt/Equity ratio
0.520.52
Cost of debt4.0%7.0%
After-tax WACC4.6%6.3%
Selected WACC5.4%

SHEN'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 SHEN:

cost_of_equity (6.20%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.33) + 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.