FARO Technologies Inc (FARO) WACC Analysis

As of May 21, 2025, FARO Technologies Inc (FARO) carries a Weighted Average Cost of Capital (WACC) of 17.0%. WACC reflects the blended rate FARO Technologies Inc must pay to both equity and debt holders.

Within that, the cost of equity is 8.7%, the cost of debt is 12.4%, and the effective tax rate is 26.2%.

Breakdown of WACC Components

• Long-term bond rate: 3.9% – 4.4%
• Equity market risk premium: 4.6% – 5.6%
• Adjusted beta: 1.05 – 1.11
• Additional risk adjustment: 0.0% – 0.5%
• Debt-to-equity ratio: 0.09

What It Means for Investors

With a selected WACC of 17.0%, FARO Technologies Inc must ensure any new investment returns exceed this threshold to generate shareholder value. This level reflects a relatively high financing requirement.