AME
AMETEK Inc
Price:  
170.07 
USD
Volume:  
1,160,347.00
United States | Electrical Equipment
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Ametek WACC - Weighted Average Cost of Capital

The WACC of AMETEK Inc (AME) is 9.0%.

The Cost of Equity of AMETEK Inc (AME) is 9.30%.
The Cost of Debt of AMETEK Inc (AME) is 4.25%.

Range Selected
Cost of equity 8.30% - 10.30% 9.30%
Tax rate 18.60% - 18.90% 18.75%
Cost of debt 4.00% - 4.50% 4.25%
WACC 8.0% - 10.0% 9.0%
WACC

Ametek WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.95 0.97
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.30% 10.30%
Tax rate 18.60% 18.90%
Debt/Equity ratio 0.05 0.05
Cost of debt 4.00% 4.50%
After-tax WACC 8.0% 10.0%
Selected WACC 9.0%

Ametek'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 Ametek:

cost_of_equity (9.30%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.95) + 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.