VIDE
Video Display Corp
Price:  
0.80 
USD
Volume:  
1,190.00
United States | Technology Hardware, Storage & Peripherals
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VIDE WACC - Weighted Average Cost of Capital

The WACC of Video Display Corp (VIDE) is 6.7%.

The Cost of Equity of Video Display Corp (VIDE) is 8.00%.
The Cost of Debt of Video Display Corp (VIDE) is 5.50%.

Range Selected
Cost of equity 6.90% - 9.10% 8.00%
Tax rate 26.20% - 27.00% 26.60%
Cost of debt 4.00% - 7.00% 5.50%
WACC 5.6% - 7.8% 6.7%
WACC

VIDE WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.65 0.75
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.90% 9.10%
Tax rate 26.20% 27.00%
Debt/Equity ratio 0.46 0.46
Cost of debt 4.00% 7.00%
After-tax WACC 5.6% 7.8%
Selected WACC 6.7%

VIDE'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 VIDE:

cost_of_equity (8.00%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.65) + 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.