SPWR WACC - Weighted Average Cost of Capital
The WACC of SunPower Corp (SPWR) is 7.3%.
| Range | Selected | |
| Cost of equity | 9.9% - 12.7% | 11.3% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.6% - 8.0% | 7.3% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.3 | 1.41 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.9% | 12.7% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 1.09 | 1.09 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.6% | 8.0% |
| Selected WACC | 7.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| SPWR | SunPower Corp | 1.09 | 0.18 | 0.1 |
| DIOD | Diodes Inc | 0.02 | 1.84 | 1.81 |
| DSPG | Dsp Group Inc | 0 | 0.9 | 0.9 |
| FSLR | First Solar Inc | 0.04 | 0.89 | 0.87 |
| IPHI | Inphi Corp | 0.05 | 0.93 | 0.89 |
| JKS | JinkoSolar Holding Co Ltd | 7.22 | 0.81 | 0.13 |
| MAXN | Maxeon Solar Technologies Ltd | 5.3 | 0.7 | 0.14 |
| MTSI | MACOM Technology Solutions Holdings Inc | 0.05 | 1.73 | 1.67 |
| NPTN | NeoPhotonics Corp | 0.05 | 0.75 | 0.72 |
| SYNA | Synaptics Inc | 0.39 | 2.04 | 1.59 |
| Low | High | |
| Unlevered beta | 0.81 | 0.9 |
| Relevered beta | 1.45 | 1.61 |
| Adjusted relevered beta | 1.3 | 1.41 |
SPWR'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 SPWR:
cost_of_equity (11.30%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.3) + 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.