COLM
Columbia Sportswear Co
Price:  
59.62 
USD
Volume:  
535,389.00
United States | Textiles, Apparel & Luxury Goods
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COLM WACC - Weighted Average Cost of Capital

The WACC of Columbia Sportswear Co (COLM) is 7.1%.

The Cost of Equity of Columbia Sportswear Co (COLM) is 10.25%.
The Cost of Debt of Columbia Sportswear Co (COLM) is 5.00%.

Range Selected
Cost of equity 8.50% - 12.00% 10.25%
Tax rate 22.20% - 22.70% 22.45%
Cost of debt 5.00% - 5.00% 5.00%
WACC 6.2% - 7.9% 7.1%
WACC

COLM WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.01 1.28
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.50% 12.00%
Tax rate 22.20% 22.70%
Debt/Equity ratio 1 1
Cost of debt 5.00% 5.00%
After-tax WACC 6.2% 7.9%
Selected WACC 7.1%

COLM'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 COLM:

cost_of_equity (10.25%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.01) + 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.