AAWW WACC - Weighted Average Cost of Capital
The WACC of Atlas Air Worldwide Holdings Inc (AAWW) is 7.4%.
| Range | Selected | |
| Cost of equity | 9.1% - 12.2% | 10.65% |
| Tax rate | 23.4% - 25.3% | 24.35% |
| Cost of debt | 4.0% - 4.8% | 4.4% |
| WACC | 6.5% - 8.4% | 7.4% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.14 | 1.31 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.1% | 12.2% |
| Tax rate | 23.4% | 25.3% |
| Debt/Equity ratio | 0.78 | 0.78 |
| Cost of debt | 4.0% | 4.8% |
| After-tax WACC | 6.5% | 8.4% |
| Selected WACC | 7.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| AAWW | Atlas Air Worldwide Holdings Inc | 0.78 | 1.14 | 0.72 |
| ATSG | Air Transport Services Group Inc | 1.05 | 0.94 | 0.52 |
| CJT.TO | Cargojet Inc | 0.52 | 1.46 | 1.04 |
| ECHO | Echo Global Logistics Inc | 0.11 | 0.79 | 0.73 |
| HUBG | Hub Group Inc | 0.13 | 1.05 | 0.95 |
| RLGT | Radiant Logistics Inc | 0 | 0.97 | 0.97 |
| XPO | XPO Logistics Inc | 0.25 | 1.65 | 1.39 |
| DX.L | DX (Group) PLC | 0.41 | 0.93 | 0.7 |
| IDL.PA | ID Logistics SAS | 0.51 | 1.24 | 0.89 |
| XPD.L | Xpediator PLC | 1.23 | 1.51 | 0.78 |
| Low | High | |
| Unlevered beta | 0.76 | 0.91 |
| Relevered beta | 1.21 | 1.46 |
| Adjusted relevered beta | 1.14 | 1.31 |
AAWW'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 AAWW:
cost_of_equity (10.65%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.14) + 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.