ALTG WACC - Weighted Average Cost of Capital
The WACC of Alta Equipment Group Inc (ALTG) is 14.1%.
| Range | Selected | |
| Cost of equity | 22.1% - 29.7% | 25.9% |
| Tax rate | 17.5% - 21.2% | 19.35% |
| Cost of debt | 5.8% - 23.9% | 14.85% |
| WACC | 7.6% - 20.6% | 14.1% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 3.97 | 4.44 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 22.1% | 29.7% |
| Tax rate | 17.5% | 21.2% |
| Debt/Equity ratio | 5.22 | 5.22 |
| Cost of debt | 5.8% | 23.9% |
| After-tax WACC | 7.6% | 20.6% |
| Selected WACC | 14.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| ALTG | Alta Equipment Group Inc | 5.22 | 0.08 | 0.02 |
| CERV.TO | Cervus Equipment Corp | 0.59 | 1.76 | 1.2 |
| DNOW | NOW Inc | 0.01 | 1.37 | 1.35 |
| DXPE | DXP Enterprises Inc | 0.47 | 1.77 | 1.3 |
| FTT.TO | Finning International Inc | 0.33 | 1.61 | 1.27 |
| HDI.TO | Hardwoods Distribution Inc | 1.17 | 1.71 | 0.89 |
| MRC | MRC Global Inc | 0.31 | 1.46 | 1.18 |
| RUS.TO | Russel Metals Inc | 0.08 | 1.27 | 1.2 |
| TBL.TO | Taiga Building Products Ltd | 0.18 | 0.28 | 0.24 |
| WJX.TO | Wajax Corp | 1.11 | 1.23 | 0.66 |
| Low | High | |
| Unlevered beta | 1.06 | 1.2 |
| Relevered beta | 5.43 | 6.13 |
| Adjusted relevered beta | 3.97 | 4.44 |
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.