CMCO WACC - Weighted Average Cost of Capital
The WACC of Columbus McKinnon Corp (CMCO) is 9.2%.
| Range | Selected | |
| Cost of equity | 10.9% - 13.8% | 12.35% |
| Tax rate | 17.7% - 23.4% | 20.55% |
| Cost of debt | 6.4% - 9.1% | 7.75% |
| WACC | 8.1% - 10.4% | 9.2% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.52 | 1.6 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.9% | 13.8% |
| Tax rate | 17.7% | 23.4% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 6.4% | 9.1% |
| After-tax WACC | 8.1% | 10.4% |
| Selected WACC | 9.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| CMCO | Columbus McKinnon Corp | 1 | 1.07 | 0.61 |
| AIN | Albany International Corp | 0.15 | 1.15 | 1.03 |
| CIR | CIRCOR International Inc | 0.44 | 1.39 | 1.04 |
| EPAC | Enerpac Tool Group Corp | 0.09 | 1.04 | 0.97 |
| KAI | Kadant Inc | 0.07 | 1.34 | 1.27 |
| MWA | Mueller Water Products Inc | 0.12 | 1.21 | 1.11 |
| NPO | EnPro Industries Inc | 0.15 | 1.4 | 1.26 |
| SXI | Standex International Corp | 0.07 | 1.26 | 1.2 |
| TNC | Tennant Co | 0.13 | 0.87 | 0.79 |
| TRS | TriMas Corp | 0.33 | 0.83 | 0.66 |
| Low | High | |
| Unlevered beta | 1 | 1.07 |
| Relevered beta | 1.78 | 1.9 |
| Adjusted relevered beta | 1.52 | 1.6 |
CMCO'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 CMCO:
cost_of_equity (12.35%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.52) + 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.