The WACC of Umbra Applied Technologies Group Inc (UATG) is 6.1%.
Range | Selected | |
Cost of equity | 6.2% - 11.0% | 8.6% |
Tax rate | 26.2% - 27.0% | 26.6% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 5.0% - 7.3% | 6.1% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 4.6% | 5.6% |
Adjusted beta | 0.51 | 1.09 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 6.2% | 11.0% |
Tax rate | 26.2% | 27.0% |
Debt/Equity ratio | 1 | 1 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 5.0% | 7.3% |
Selected WACC | 6.1% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
UATG | Umbra Applied Technologies Group Inc | 1.14 | -0.51 | -0.28 |
ASTC | Astrotech Corp | 0.02 | 0.27 | 0.26 |
AZ.V | A2Z Smart Technologies Corp | 0.06 | 1.33 | 1.27 |
FLY.V | FLYHT Aerospace Solutions Ltd | 0.52 | -0.76 | -0.55 |
GIGA | Giga-tronics Inc | 294.6 | -0.3 | 0 |
ISSC | Innovative Solutions and Support Inc | 0.11 | 1.71 | 1.58 |
NTS.V | Nanotech Security Corp | 0.01 | -0.04 | -0.04 |
OPXS | Optex Systems Holdings Inc | 0.01 | 1.08 | 1.07 |
TIKK | Tel-Instrument Electronics Corp | 0.06 | 0.4 | 0.39 |
VTSI | VirTra Inc | 0.1 | 1.74 | 1.62 |
Low | High | |
Unlevered beta | 0.16 | 0.66 |
Relevered beta | 0.27 | 1.13 |
Adjusted relevered beta | 0.51 | 1.09 |
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 UATG:
cost_of_equity (8.60%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.51) + 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.