CVLG
Covenant Logistics Group Inc
Price:  
21.18 
USD
Volume:  
113,419.00
United States | Road & Rail
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CVLG WACC - Weighted Average Cost of Capital

The WACC of Covenant Logistics Group Inc (CVLG) is 7.7%.

The Cost of Equity of Covenant Logistics Group Inc (CVLG) is 9.55%.
The Cost of Debt of Covenant Logistics Group Inc (CVLG) is 4.85%.

Range Selected
Cost of equity 8.30% - 10.80% 9.55%
Tax rate 23.80% - 24.40% 24.10%
Cost of debt 4.80% - 4.90% 4.85%
WACC 6.8% - 8.6% 7.7%
WACC

CVLG WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.97 1.07
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.30% 10.80%
Tax rate 23.80% 24.40%
Debt/Equity ratio 0.46 0.46
Cost of debt 4.80% 4.90%
After-tax WACC 6.8% 8.6%
Selected WACC 7.7%

CVLG'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 CVLG:

cost_of_equity (9.55%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.97) + 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.