WYY
WidePoint Corp
Price:  
3.01 
USD
Volume:  
116,415
United States | IT Services

WYY WACC - Weighted Average Cost of Capital

The WACC of WidePoint Corp (WYY) is 6.2%.

The Cost of Equity of WidePoint Corp (WYY) is 7.35%.
The Cost of Debt of WidePoint Corp (WYY) is 7%.

RangeSelected
Cost of equity5.7% - 9.0%7.35%
Tax rate17.9% - 40.5%29.2%
Cost of debt7.0% - 7.0%7%
WACC5.7% - 6.6%6.2%
WACC

WYY WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta0.410.74
Additional risk adjustments0.0%0.5%
Cost of equity5.7%9.0%
Tax rate17.9%40.5%
Debt/Equity ratio
11
Cost of debt7.0%7.0%
After-tax WACC5.7%6.6%
Selected WACC6.2%

WYY'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 WYY:

cost_of_equity (7.35%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.41) + 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.