SODI
Solitron Devices Inc
Price:  
15.69 
USD
Volume:  
430.00
United States | Semiconductors & Semiconductor Equipment
Valuation
Overview
Financials
Forecast
Compare
Historical Price
SolvencyDividends
Transactions
People

SODI WACC - Weighted Average Cost of Capital

The WACC of Solitron Devices Inc (SODI) is 7.0%.

The Cost of Equity of Solitron Devices Inc (SODI) is 7.50%.
The Cost of Debt of Solitron Devices Inc (SODI) is 4.60%.

Range Selected
Cost of equity 6.30% - 8.70% 7.50%
Tax rate 26.20% - 27.00% 26.60%
Cost of debt 4.60% - 4.60% 4.60%
WACC 6.0% - 8.1% 7.0%
WACC

SODI WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.53 0.69
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.30% 8.70%
Tax rate 26.20% 27.00%
Debt/Equity ratio 0.13 0.13
Cost of debt 4.60% 4.60%
After-tax WACC 6.0% 8.1%
Selected WACC 7.0%

SODI'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 SODI:

cost_of_equity (7.50%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.53) + 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.