TKOI WACC - Weighted Average Cost of Capital
The WACC of Telkonet Inc (TKOI) is 10.1%.
| Range | Selected | |
| Cost of equity | 5.4% - 8.7% | 7.05% |
| Tax rate | 1.2% - 1.9% | 1.55% |
| Cost of debt | 7.0% - 19.6% | 13.3% |
| WACC | 6.2% - 13.9% | 10.1% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.34 | 0.69 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.4% | 8.7% |
| Tax rate | 1.2% | 1.9% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 7.0% | 19.6% |
| After-tax WACC | 6.2% | 13.9% |
| Selected WACC | 10.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| TKOI | Telkonet Inc | 1.07 | -3.29 | -1.6 |
| BDR | Blonder Tongue Laboratories Inc | 0.99 | 0.65 | 0.33 |
| IFXY | Infrax Systems Inc | 0.34 | 0.62 | 0.46 |
| INVT | Inventergy Global Inc | 42.47 | 1.23 | 0.03 |
| LTE.V | Lite Access Technologies Inc | 0.08 | -0.1 | -0.09 |
| VTI.V | Valdor Technology International Inc | 0.08 | -0.14 | -0.13 |
| YFI.V | Edgewater Wireless Systems Inc | 0.02 | -0.16 | -0.16 |
| YTY.V | Wi2wi Corp | 0.97 | 1.31 | 0.67 |
| Low | High | |
| Unlevered beta | -0.1 | 0.09 |
| Relevered beta | 0.01 | 0.54 |
| Adjusted relevered beta | 0.34 | 0.69 |
TKOI'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 TKOI:
cost_of_equity (7.05%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.34) + 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.