CMT WACC - Weighted Average Cost of Capital
The WACC of Core Molding Technologies Inc (CMT) is 7.4%.
| Range | Selected | |
| Cost of equity | 6.7% - 9.2% | 7.95% |
| Tax rate | 22.8% - 33.4% | 28.1% |
| Cost of debt | 4.5% - 5.4% | 4.95% |
| WACC | 6.2% - 8.5% | 7.4% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.61 | 0.78 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.7% | 9.2% |
| Tax rate | 22.8% | 33.4% |
| Debt/Equity ratio | 0.15 | 0.15 |
| Cost of debt | 4.5% | 5.4% |
| After-tax WACC | 6.2% | 8.5% |
| Selected WACC | 7.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| CMT | Core Molding Technologies Inc | 0.15 | 0.5 | 0.45 |
| CHCC | China Chemical Corp | 2.04 | 0.26 | 0.1 |
| FFHL | Fuwei Films (Holdings) Co Ltd | 0 | 0.91 | 0.91 |
| GLGI | Greystone Logistics Inc | 0.37 | 0.17 | 0.13 |
| GRA.V | NanoXplore Inc | 0.08 | 1.15 | 1.08 |
| KBLB | Kraig Biocraft Laboratories Inc | 0.02 | 0.61 | 0.6 |
| MX.TO | Methanex Corp | 1.48 | 1.99 | 0.94 |
| ONBI | One Bio Corp | 0.47 | -0.83 | -0.61 |
| TANH | Tantech Holdings Ltd | 2.98 | 1.97 | 0.6 |
| TREC | Trecora Resources | 0.18 | 0.3 | 0.27 |
| Low | High | |
| Unlevered beta | 0.37 | 0.6 |
| Relevered beta | 0.42 | 0.67 |
| Adjusted relevered beta | 0.61 | 0.78 |
CMT'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 CMT:
cost_of_equity (7.95%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.61) + 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.