ADMT
ADM Tronics Unlimited Inc
Price:  
0.07 
USD
Volume:  
13,640.00
United States | Chemicals
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ADMT WACC - Weighted Average Cost of Capital

The WACC of ADM Tronics Unlimited Inc (ADMT) is 6.2%.

The Cost of Equity of ADM Tronics Unlimited Inc (ADMT) is 6.25%.
The Cost of Debt of ADM Tronics Unlimited Inc (ADMT) is 7.50%.

Range Selected
Cost of equity 5.40% - 7.10% 6.25%
Tax rate 26.20% - 27.00% 26.60%
Cost of debt 7.00% - 8.00% 7.50%
WACC 5.4% - 7.0% 6.2%
WACC

ADMT WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.23 0.31
Additional risk adjustments 0.5% 1.0%
Cost of equity 5.40% 7.10%
Tax rate 26.20% 27.00%
Debt/Equity ratio 0.11 0.11
Cost of debt 7.00% 8.00%
After-tax WACC 5.4% 7.0%
Selected WACC 6.2%

ADMT'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 ADMT:

cost_of_equity (6.25%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.23) + risk_adjustments (0.75%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.