AMRC
Ameresco Inc
Price:  
13.19 
USD
Volume:  
648,478.00
United States | Construction & Engineering
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Ameresco WACC - Weighted Average Cost of Capital

The WACC of Ameresco Inc (AMRC) is 13.5%.

The Cost of Equity of Ameresco Inc (AMRC) is 20.00%.
The Cost of Debt of Ameresco Inc (AMRC) is 14.00%.

Range Selected
Cost of equity 17.10% - 22.90% 20.00%
Tax rate 5.10% - 27.70% 16.40%
Cost of debt 7.10% - 20.90% 14.00%
WACC 9.6% - 17.3% 13.5%
WACC

Ameresco WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 2.88 3.22
Additional risk adjustments 0.0% 0.5%
Cost of equity 17.10% 22.90%
Tax rate 5.10% 27.70%
Debt/Equity ratio 2.59 2.59
Cost of debt 7.10% 20.90%
After-tax WACC 9.6% 17.3%
Selected WACC 13.5%

Ameresco'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 Ameresco:

cost_of_equity (20.00%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (2.88) + 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.