AMOT WACC - Weighted Average Cost of Capital
The WACC of Allied Motion Technologies Inc (AMOT) is 6.2%.
| Range | Selected | |
| Cost of equity | 6.1% - 8.4% | 7.25% |
| Tax rate | 22.1% - 26.7% | 24.4% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.4% - 7.0% | 6.2% |
| Category | Low | High |
| Long-term bond rate | 4.2% | 4.7% |
| Equity market risk premium | 4.2% | 5.2% |
| Adjusted beta | 0.45 | 0.61 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.1% | 8.4% |
| Tax rate | 22.1% | 26.7% |
| Debt/Equity ratio | 0.43 | 0.43 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.4% | 7.0% |
| Selected WACC | 6.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| AMOT | Allied Motion Technologies Inc | 0.43 | 1.71 | 1.3 |
| APWC | Asia Pacific Wire & Cable Corporation Ltd | 0.93 | 0.17 | 0.1 |
| HMM.A.TO | Hammond Manufacturing Company Ltd | 0.57 | 0.86 | 0.61 |
| HPS.A.TO | Hammond Power Solutions Inc | 0.03 | 2.41 | 2.35 |
| LYTS | LSI Industries Inc | 0.12 | 1.29 | 1.19 |
| PLPC | Preformed Line Products Co | 0.04 | 0.76 | 0.74 |
| PPRW | Premier Power Renewable Energy Inc | 0.12 | -33.28 | -30.68 |
| THR | Thermon Group Holdings Inc | 0.18 | 1.19 | 1.05 |
| ULBI | Ultralife Corp | 0.65 | 1.2 | 0.81 |
| XDSL | mPhase Technologies Inc | 383.87 | 19.02 | 0.07 |
| Low | High | |
| Unlevered beta | 0.68 | 0.91 |
| Relevered beta | 0.18 | 0.42 |
| Adjusted relevered beta | 0.45 | 0.61 |
AMOT'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 AMOT:
cost_of_equity (7.25%) = risk_free_rate (4.45%) + equity_risk_premium (4.70%) * adjusted_beta (0.45) + 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.