SUMO
Sumo Logic Inc
Price:  
12.04 
USD
Volume:  
5,262,680.00
United States | Software
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SUMO WACC - Weighted Average Cost of Capital

The WACC of Sumo Logic Inc (SUMO) is 9.8%.

The Cost of Equity of Sumo Logic Inc (SUMO) is 12.65%.
The Cost of Debt of Sumo Logic Inc (SUMO) is 7.00%.

Range Selected
Cost of equity 10.70% - 14.60% 12.65%
Tax rate 1.50% - 1.70% 1.60%
Cost of debt 7.00% - 7.00% 7.00%
WACC 8.8% - 10.7% 9.8%
WACC

SUMO WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.48 1.74
Additional risk adjustments 0.0% 0.5%
Cost of equity 10.70% 14.60%
Tax rate 1.50% 1.70%
Debt/Equity ratio 1 1
Cost of debt 7.00% 7.00%
After-tax WACC 8.8% 10.7%
Selected WACC 9.8%

SUMO'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 SUMO:

cost_of_equity (12.65%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.48) + 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.