AGCO
AGCO Corp
Price:  
106.85 
USD
Volume:  
691,526.00
United States | Machinery
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AGCO WACC - Weighted Average Cost of Capital

The WACC of AGCO Corp (AGCO) is 9.2%.

The Cost of Equity of AGCO Corp (AGCO) is 10.95%.
The Cost of Debt of AGCO Corp (AGCO) is 4.75%.

Range Selected
Cost of equity 9.50% - 12.40% 10.95%
Tax rate 20.50% - 24.30% 22.40%
Cost of debt 4.40% - 5.10% 4.75%
WACC 8.1% - 10.3% 9.2%
WACC

AGCO WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.23 1.34
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.50% 12.40%
Tax rate 20.50% 24.30%
Debt/Equity ratio 0.32 0.32
Cost of debt 4.40% 5.10%
After-tax WACC 8.1% 10.3%
Selected WACC 9.2%

AGCO'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 AGCO:

cost_of_equity (10.95%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.23) + 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.