CPS
Cooper-Standard Holdings Inc
Price:  
20.42 
USD
Volume:  
266,191.00
United States | Auto Components
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CPS WACC - Weighted Average Cost of Capital

The WACC of Cooper-Standard Holdings Inc (CPS) is 9.9%.

The Cost of Equity of Cooper-Standard Holdings Inc (CPS) is 9.10%.
The Cost of Debt of Cooper-Standard Holdings Inc (CPS) is 11.75%.

Range Selected
Cost of equity 5.40% - 12.80% 9.10%
Tax rate 11.60% - 15.50% 13.55%
Cost of debt 7.90% - 15.60% 11.75%
WACC 6.6% - 13.1% 9.9%
WACC

CPS WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.34 1.41
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.40% 12.80%
Tax rate 11.60% 15.50%
Debt/Equity ratio 3.07 3.07
Cost of debt 7.90% 15.60%
After-tax WACC 6.6% 13.1%
Selected WACC 9.9%

CPS'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 CPS:

cost_of_equity (9.10%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.34) + 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.