ASTE
Astec Industries Inc
Price:  
42.39 
USD
Volume:  
344,191.00
United States | Machinery
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ASTE WACC - Weighted Average Cost of Capital

The WACC of Astec Industries Inc (ASTE) is 9.1%.

The Cost of Equity of Astec Industries Inc (ASTE) is 9.35%.
The Cost of Debt of Astec Industries Inc (ASTE) is 11.20%.

Range Selected
Cost of equity 8.00% - 10.70% 9.35%
Tax rate 20.00% - 41.00% 30.50%
Cost of debt 4.60% - 17.80% 11.20%
WACC 7.5% - 10.7% 9.1%
WACC

ASTE WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.9 1.04
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.00% 10.70%
Tax rate 20.00% 41.00%
Debt/Equity ratio 0.12 0.12
Cost of debt 4.60% 17.80%
After-tax WACC 7.5% 10.7%
Selected WACC 9.1%

ASTE'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 ASTE:

cost_of_equity (9.35%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.9) + 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.