EME WACC - Weighted Average Cost of Capital

The WACC of EMCOR Group Inc (EME) is 10.5%.

The Cost of Equity of EMCOR Group Inc (EME) is 10.55%.

The Cost of Debt of EMCOR Group Inc (EME) is 33.15%.

	Range	Selected
Cost of equity	9.20% - 11.90%	10.55%
Tax rate	27.10% - 27.40%	27.25%
Cost of debt	4.50% - 61.80%	33.15%
WACC	9.2% - 11.9%	10.5%

WACC

EME WACC calculation

Category	Low	High

Long-term bond rate	3.9%	4.4%
Equity market risk premium	4.6%	5.6%
Adjusted beta	1.15	1.25

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.20%	11.90%

Tax rate	27.10%	27.40%
Debt/Equity ratio	0	0
Cost of debt	4.50%	61.80%

After-tax WACC	9.2%	11.9%


Selected WACC	10.5%

EME'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 EME:

cost_of_equity (10.55%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.15) + 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.