AKRN.ME WACC - Weighted Average Cost of Capital

The WACC of Akron PAO (AKRN.ME) is 20.4%.

The Cost of Equity of Akron PAO (AKRN.ME) is 23.50%.

The Cost of Debt of Akron PAO (AKRN.ME) is 12.50%.

	Range	Selected
Cost of equity	21.50% - 25.50%	23.50%
Tax rate	22.00% - 25.50%	23.75%
Cost of debt	7.00% - 18.00%	12.50%
WACC	18.0% - 22.9%	20.4%

WACC

AKRN.ME WACC calculation

Category	Low	High

Long-term bond rate	15.8%	16.3%
Equity market risk premium	11.7%	12.7%
Adjusted beta	0.49	0.69

Additional risk adjustments	0.0%	0.5%
Cost of equity	21.50%	25.50%

Tax rate	22.00%	25.50%
Debt/Equity ratio	0.28	0.28
Cost of debt	7.00%	18.00%

After-tax WACC	18.0%	22.9%


Selected WACC	20.4%

AKRN.ME'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 AKRN.ME:

cost_of_equity (23.50%) = risk_free_rate (16.05%) + equity_risk_premium (12.20%) * adjusted_beta (0.49) + 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.