CMCO WACC - Weighted Average Cost of Capital

The WACC of Columbus McKinnon Corp (CMCO) is 10.0%.

The Cost of Equity of Columbus McKinnon Corp (CMCO) is 11.85%.

The Cost of Debt of Columbus McKinnon Corp (CMCO) is 9.40%.

	Range	Selected
Cost of equity	10.20% - 13.50%	11.85%
Tax rate	17.70% - 23.40%	20.55%
Cost of debt	6.40% - 12.40%	9.40%
WACC	8.1% - 11.8%	10.0%

WACC

CMCO WACC calculation

Category	Low	High

Long-term bond rate	3.9%	4.4%
Equity market risk premium	4.6%	5.6%
Adjusted beta	1.37	1.54

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.20%	13.50%

Tax rate	17.70%	23.40%
Debt/Equity ratio	0.72	0.72
Cost of debt	6.40%	12.40%

After-tax WACC	8.1%	11.8%


Selected WACC	10.0%

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 (11.85%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.37) + 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.