SHEN WACC - Weighted Average Cost of Capital
The WACC of Shenandoah Telecommunications Co (SHEN) is 5.4%.
| Range | Selected | |
| Cost of equity | 5.4% - 7.0% | 6.2% |
| Tax rate | 26.6% - 29.7% | 28.15% |
| Cost of debt | 4.0% - 7.0% | 5.5% |
| WACC | 4.6% - 6.3% | 5.4% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.33 | 0.38 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.4% | 7.0% |
| Tax rate | 26.6% | 29.7% |
| Debt/Equity ratio | 0.52 | 0.52 |
| Cost of debt | 4.0% | 7.0% |
| After-tax WACC | 4.6% | 6.3% |
| Selected WACC | 5.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| SHEN | Shenandoah Telecommunications Co | 0.52 | 0.01 | 0.01 |
| AKOM | Aerkomm Inc | 107.38 | 0.22 | 0 |
| GOGO | Gogo Inc | 0.41 | 1.27 | 0.98 |
| SURG | Surgepays Inc | 0.06 | -0.12 | -0.12 |
| TIGO | Millicom International Cellular SA | 1.04 | 0.23 | 0.13 |
| UCL | Ucloudlink Group Inc | 0.1 | 0.23 | 0.21 |
| WIFI | Boingo Wireless Inc | 0.28 | 1.53 | 1.28 |
| ICEGR.OL | Ice Group ASA | 64.46 | 0.2 | 0 |
| NETM B.ST | Netmore Group AB | 0 | -0.73 | -0.73 |
| NTEL.OL | Nortel AS | 0.03 | -1.45 | -1.42 |
| Low | High | |
| Unlevered beta | 0 | 0.06 |
| Relevered beta | 0 | 0.07 |
| Adjusted relevered beta | 0.33 | 0.38 |
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.