SHSP WACC - Weighted Average Cost of Capital
The WACC of SharpSpring Inc (SHSP) is 8.3%.
| Range | Selected | |
| Cost of equity | 7.1% - 9.5% | 8.3% |
| Tax rate | 12.9% - 22.2% | 17.55% |
| Cost of debt | 7.0% - 7.0% | 7% |
| WACC | 7.1% - 9.4% | 8.3% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 4.2% | 5.2% |
| Adjusted beta | 0.92 | 1.03 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.1% | 9.5% |
| Tax rate | 12.9% | 22.2% |
| Debt/Equity ratio | 0.02 | 0.02 |
| Cost of debt | 7.0% | 7.0% |
| After-tax WACC | 7.1% | 9.4% |
| Selected WACC | 8.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| SHSP | SharpSpring Inc | 0.02 | 1.84 | 1.8 |
| CRM | Salesforce.Com Inc | 0.03 | 1.27 | 1.23 |
| INUV | Inuvo Inc | 0 | 1.32 | 1.32 |
| IOTC | Iota Communications Inc | 202.21 | -0.75 | 0 |
| LCHD | Leader Capital Holdings Corp | 0.23 | -0.05 | -0.04 |
| MVP.V | MediaValet Inc | 0.03 | 0.58 | 0.56 |
| PCYG | Park City Group Inc | 0 | 0.15 | 0.15 |
| PERK.CN | Perk Labs Inc | 0.03 | -0.4 | -0.4 |
| PHUN | Phunware Inc | 1.13 | 1.38 | 0.73 |
| TEUM | Pareteum Corp | 206.35 | 0.8 | 0 |
| Low | High | |
| Unlevered beta | 0.09 | 0.63 |
| Relevered beta | 0.88 | 1.04 |
| Adjusted relevered beta | 0.92 | 1.03 |
SHSP'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 SHSP:
cost_of_equity (8.30%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (0.92) + 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.