ECOL WACC - Weighted Average Cost of Capital
The WACC of US Ecology Inc (ECOL) is 8.1%.
| Range | Selected | |
| Cost of equity | 8.0% - 10.6% | 9.3% |
| Tax rate | 24.6% - 31.2% | 27.9% |
| Cost of debt | 4.0% - 12.6% | 8.3% |
| WACC | 6.3% - 10.0% | 8.1% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 4.2% | 5.2% |
| Adjusted beta | 1.13 | 1.23 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.0% | 10.6% |
| Tax rate | 24.6% | 31.2% |
| Debt/Equity ratio | 0.5 | 0.5 |
| Cost of debt | 4.0% | 12.6% |
| After-tax WACC | 6.3% | 10.0% |
| Selected WACC | 8.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| ECOL | US Ecology Inc | 0.5 | 0.86 | 0.62 |
| BLM.V | Blumetric Environmental Inc | 0.05 | 1.32 | 1.27 |
| CHRA | Charah Solutions Inc | 9.29 | 1.15 | 0.14 |
| CWST | Casella Waste Systems Inc | 0.16 | 0.41 | 0.37 |
| EWK.V | Earthworks Industries Inc | 0.86 | -0.18 | -0.11 |
| HCCI | Heritage-Crystal Clean Inc | 0.12 | 0.31 | 0.28 |
| MJWL | Majic Wheels Corp | 444.97 | 357.89 | 1.07 |
| PESI | Perma-Fix Environmental Services Inc | 0.02 | 1.14 | 1.13 |
| QRHC | Quest Resource Holding Corp | 1.5 | 1.24 | 0.58 |
| USLQ | U S Liquids Inc | 4.53 | 0 | 0 |
| Low | High | |
| Unlevered beta | 0.33 | 0.6 |
| Relevered beta | 1.19 | 1.34 |
| Adjusted relevered beta | 1.13 | 1.23 |
ECOL'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 ECOL:
cost_of_equity (9.30%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (1.13) + 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.