CW WACC - Weighted Average Cost of Capital
The WACC of Curtiss-Wright Corp (CW) is 7.8%.
| Range | Selected | |
| Cost of equity | 7.0% - 9.0% | 8% |
| Tax rate | 23.4% - 23.8% | 23.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.9% - 8.7% | 7.8% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.69 | 0.73 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.0% | 9.0% |
| Tax rate | 23.4% | 23.8% |
| Debt/Equity ratio | 0.06 | 0.06 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.9% | 8.7% |
| Selected WACC | 7.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| CW | Curtiss-Wright Corp | 0.06 | 1.28 | 1.23 |
| AIRI | Air Industries Group | 2.07 | 0.99 | 0.38 |
| AJRD | Aerojet Rocketdyne Holdings Inc | 0.06 | 0.54 | 0.52 |
| BWXT | BWX Technologies Inc | 0.08 | 1.05 | 0.99 |
| HRX.TO | Heroux Devtek Inc | 0.2 | 0.21 | 0.18 |
| HXL | Hexcel Corp | 0.15 | 1.17 | 1.04 |
| MAXR | Maxar Technologies Inc | 0.57 | 0.87 | 0.6 |
| SIF | SIFCO Industries Inc | 1.13 | 0.95 | 0.51 |
| SPR | Spirit AeroSystems Holdings Inc | 0.97 | 0.96 | 0.55 |
| TGI | Triumph Group Inc | 0.49 | 0.53 | 0.39 |
| Low | High | |
| Unlevered beta | 0.51 | 0.57 |
| Relevered beta | 0.54 | 0.6 |
| Adjusted relevered beta | 0.69 | 0.73 |
CW'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 CW:
cost_of_equity (8.00%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.69) + 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.