TBCH WACC - Weighted Average Cost of Capital

The WACC of Turtle Beach Corp (TBCH) is 9.0%.

The Cost of Equity of Turtle Beach Corp (TBCH) is 10.45%.

The Cost of Debt of Turtle Beach Corp (TBCH) is 6.10%.

	Range	Selected
Cost of equity	9.10% - 11.80%	10.45%
Tax rate	10.90% - 17.60%	14.25%
Cost of debt	6.10% - 6.10%	6.10%
WACC	8.1% - 9.9%	9.0%

WACC

TBCH WACC calculation

Category	Low	High

Long-term bond rate	3.9%	4.4%
Equity market risk premium	4.6%	5.6%
Adjusted beta	1.14	1.23

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.10%	11.80%

Tax rate	10.90%	17.60%
Debt/Equity ratio	0.39	0.39
Cost of debt	6.10%	6.10%

After-tax WACC	8.1%	9.9%


Selected WACC	9.0%

TBCH'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 TBCH:

cost_of_equity (10.45%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.14) + 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.