ARCB
ArcBest Corp
Price:  
58.54 
USD
Volume:  
268,045.00
United States | Road & Rail
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ArcBest WACC - Weighted Average Cost of Capital

The WACC of ArcBest Corp (ARCB) is 7.8%.

The Cost of Equity of ArcBest Corp (ARCB) is 8.45%.
The Cost of Debt of ArcBest Corp (ARCB) is 4.25%.

Range Selected
Cost of equity 7.40% - 9.50% 8.45%
Tax rate 23.10% - 23.50% 23.30%
Cost of debt 4.00% - 4.50% 4.25%
WACC 6.9% - 8.8% 7.8%
WACC

ArcBest WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.77 0.83
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.40% 9.50%
Tax rate 23.10% 23.50%
Debt/Equity ratio 0.13 0.13
Cost of debt 4.00% 4.50%
After-tax WACC 6.9% 8.8%
Selected WACC 7.8%

ArcBest'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 ArcBest:

cost_of_equity (8.45%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.77) + 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.