ALCO
Alico Inc
Price:  
32.40 
USD
Volume:  
18,979.00
United States | Food Products
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ALCO WACC - Weighted Average Cost of Capital

The WACC of Alico Inc (ALCO) is 5.6%.

The Cost of Equity of Alico Inc (ALCO) is 6.20%.
The Cost of Debt of Alico Inc (ALCO) is 5.50%.

Range Selected
Cost of equity 5.40% - 7.00% 6.20%
Tax rate 24.80% - 28.00% 26.40%
Cost of debt 4.00% - 7.00% 5.50%
WACC 4.8% - 6.5% 5.6%
WACC

ALCO WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.33 0.39
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.40% 7.00%
Tax rate 24.80% 28.00%
Debt/Equity ratio 0.36 0.36
Cost of debt 4.00% 7.00%
After-tax WACC 4.8% 6.5%
Selected WACC 5.6%

ALCO'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 ALCO:

cost_of_equity (6.20%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.33) + 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.