Principal Solar Inc (PSWW) WACC Analysis

As of June 18, 2025, Principal Solar Inc (PSWW) carries a Weighted Average Cost of Capital (WACC) of 7.1%. WACC reflects the blended rate Principal Solar Inc must pay to both equity and debt holders.

Within that, the cost of equity is 5.3%, the cost of debt is 7.0%, and the effective tax rate is 0.0%.

Breakdown of WACC Components

• Long-term bond rate: 3.9% – 4.4%
• Equity market risk premium: 4.6% – 5.6%
• Adjusted beta: -1.11 – 0.38
• Additional risk adjustment: 6.5% – 7.0%
• Debt-to-equity ratio: 16.77

What It Means for Investors

With a selected WACC of 7.1%, Principal Solar Inc must ensure any new investment returns exceed this threshold to generate shareholder value. This level reflects an attractive low cost of capital.