AJRD
Aerojet Rocketdyne Holdings Inc
Price:  
57.99 
USD
Volume:  
4,127,270.00
United States | Aerospace & Defense
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AJRD WACC - Weighted Average Cost of Capital

The WACC of Aerojet Rocketdyne Holdings Inc (AJRD) is 9.8%.

The Cost of Equity of Aerojet Rocketdyne Holdings Inc (AJRD) is 10.25%.
The Cost of Debt of Aerojet Rocketdyne Holdings Inc (AJRD) is 4.30%.

Range Selected
Cost of equity 8.70% - 11.80% 10.25%
Tax rate 26.40% - 26.80% 26.60%
Cost of debt 4.00% - 4.60% 4.30%
WACC 8.3% - 11.3% 9.8%
WACC

AJRD WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.05 1.23
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.70% 11.80%
Tax rate 26.40% 26.80%
Debt/Equity ratio 0.06 0.06
Cost of debt 4.00% 4.60%
After-tax WACC 8.3% 11.3%
Selected WACC 9.8%

AJRD'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 AJRD:

cost_of_equity (10.25%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.05) + 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.