EXPD WACC - Weighted Average Cost of Capital
The WACC of Expeditors International of Washington Inc (EXPD) is 7.0%.
| Range | Selected | |
| Cost of equity | 8.8% - 11.9% | 10.35% |
| Tax rate | 25.9% - 26.1% | 26% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.3% - 7.8% | 7.0% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.08 | 1.26 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.8% | 11.9% |
| Tax rate | 25.9% | 26.1% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.3% | 7.8% |
| Selected WACC | 7.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| EXPD | Expeditors International of Washington Inc | 1.16 | 0.5 | 0.27 |
| AAWW | Atlas Air Worldwide Holdings Inc | 0.78 | 1.14 | 0.72 |
| AIRT | Air T Inc | 2.27 | -0.12 | -0.04 |
| ATSG | Air Transport Services Group Inc | 1.05 | 0.94 | 0.53 |
| CHRW | CH Robinson Worldwide Inc | 0.12 | 0.53 | 0.49 |
| CJT.TO | Cargojet Inc | 0.5 | 1.45 | 1.05 |
| ECHO | Echo Global Logistics Inc | 0.11 | 0.79 | 0.73 |
| HUBG | Hub Group Inc | 0.12 | 0.98 | 0.9 |
| PACC | Pacific CMA Inc | 1.07 | 0.35 | 0.2 |
| RLGT | Radiant Logistics Inc | 0 | 1.03 | 1.03 |
| XPO | XPO Logistics Inc | 0.22 | 1.51 | 1.3 |
| Low | High | |
| Unlevered beta | 0.53 | 0.73 |
| Relevered beta | 1.12 | 1.39 |
| Adjusted relevered beta | 1.08 | 1.26 |
EXPD'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 EXPD:
cost_of_equity (10.35%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.08) + 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.