VATE WACC - Weighted Average Cost of Capital

The WACC of Innovate Corp (VATE) is 12.3%.

The Cost of Equity of Innovate Corp (VATE) is 39.90%.

The Cost of Debt of Innovate Corp (VATE) is 11.10%.

	Range	Selected
Cost of equity	33.40% - 46.40%	39.90%
Tax rate	10.60% - 13.80%	12.20%
Cost of debt	6.60% - 15.60%	11.10%
WACC	8.3% - 16.3%	12.3%

WACC

VATE WACC calculation

Category	Low	High

Long-term bond rate	3.9%	4.4%
Equity market risk premium	4.6%	5.6%
Adjusted beta	6.42	7.41

Additional risk adjustments	0.0%	0.5%
Cost of equity	33.40%	46.40%

Tax rate	10.60%	13.80%
Debt/Equity ratio	10.57	10.57
Cost of debt	6.60%	15.60%

After-tax WACC	8.3%	16.3%


Selected WACC	12.3%

VATE'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 VATE:

cost_of_equity (39.90%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (6.42) + 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.