AOUT
American Outdoor Brands Inc
Price:  
9.41 
USD
Volume:  
63,337.00
United States | Leisure Products
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AOUT WACC - Weighted Average Cost of Capital

The WACC of American Outdoor Brands Inc (AOUT) is 8.4%.

The Cost of Equity of American Outdoor Brands Inc (AOUT) is 10.85%.
The Cost of Debt of American Outdoor Brands Inc (AOUT) is 7.00%.

Range Selected
Cost of equity 9.40% - 12.30% 10.85%
Tax rate 10.70% - 19.80% 15.25%
Cost of debt 7.00% - 7.00% 7.00%
WACC 7.8% - 9.0% 8.4%
WACC

AOUT WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.2 1.33
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.40% 12.30%
Tax rate 10.70% 19.80%
Debt/Equity ratio 1 1
Cost of debt 7.00% 7.00%
After-tax WACC 7.8% 9.0%
Selected WACC 8.4%

AOUT'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 AOUT:

cost_of_equity (10.85%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.2) + 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.