TAYD WACC - Weighted Average Cost of Capital
The WACC of Taylor Devices Inc (TAYD) is 7.4%.
| Range | Selected | |
| Cost of equity | 8.5% - 12.5% | 10.5% |
| Tax rate | 14.7% - 16.8% | 15.75% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.4% - 8.3% | 7.4% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.01 | 1.37 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.5% | 12.5% |
| Tax rate | 14.7% | 16.8% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.4% | 8.3% |
| Selected WACC | 7.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| TAYD | Taylor Devices Inc | 1.14 | 1 | 0.51 |
| DLPX | Delphax Technologies Inc | 68.34 | -1 | -0.02 |
| IR | Ingersoll Rand Inc | 0.15 | 1.22 | 1.09 |
| KNOS | Kronos Advanced Technologies Inc | 0.04 | 1.79 | 1.73 |
| NEWA | Newater Technology Inc | 0.61 | 0.88 | 0.59 |
| OML.V | Omni Lite Industries Canada Inc | 0.44 | 0.68 | 0.5 |
| PH | Parker-Hannifin Corp | 0.13 | 1.32 | 1.2 |
| REKO.V | Reko International Group Inc | 0.54 | -0.3 | -0.21 |
| TPCS | TechPrecision Corp | 0.24 | 0.82 | 0.68 |
| VJET | Voxeljet AG | 2.89 | 0.77 | 0.23 |
| XYL | Xylem Inc | 0.07 | 1.17 | 1.11 |
| Low | High | |
| Unlevered beta | 0.51 | 0.68 |
| Relevered beta | 1.01 | 1.55 |
| Adjusted relevered beta | 1.01 | 1.37 |
TAYD'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 TAYD:
cost_of_equity (10.50%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.01) + 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.