ALTG
Alta Equipment Group Inc
Price:  
7.62 
USD
Volume:  
112,232
United States | Trading Companies & Distributors

ALTG WACC - Weighted Average Cost of Capital

The WACC of Alta Equipment Group Inc (ALTG) is 14.1%.

The Cost of Equity of Alta Equipment Group Inc (ALTG) is 25.9%.
The Cost of Debt of Alta Equipment Group Inc (ALTG) is 14.85%.

RangeSelected
Cost of equity22.1% - 29.7%25.9%
Tax rate17.5% - 21.2%19.35%
Cost of debt5.8% - 23.9%14.85%
WACC7.6% - 20.6%14.1%
WACC

ALTG WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta3.974.44
Additional risk adjustments0.0%0.5%
Cost of equity22.1%29.7%
Tax rate17.5%21.2%
Debt/Equity ratio
5.225.22
Cost of debt5.8%23.9%
After-tax WACC7.6%20.6%
Selected WACC14.1%

ALTG'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 ALTG:

cost_of_equity (25.90%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (3.97) + 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.