FAST
Fastenal Co
Price:  
80.15 
USD
Volume:  
4,618,699.00
United States | Trading Companies & Distributors
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Fastenal WACC - Weighted Average Cost of Capital

The WACC of Fastenal Co (FAST) is 8.7%.

The Cost of Equity of Fastenal Co (FAST) is 8.70%.
The Cost of Debt of Fastenal Co (FAST) is 4.25%.

Range Selected
Cost of equity 7.70% - 9.70% 8.70%
Tax rate 23.90% - 24.10% 24.00%
Cost of debt 4.00% - 4.50% 4.25%
WACC 7.7% - 9.7% 8.7%
WACC

Fastenal WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.83 0.87
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.70% 9.70%
Tax rate 23.90% 24.10%
Debt/Equity ratio 0 0
Cost of debt 4.00% 4.50%
After-tax WACC 7.7% 9.7%
Selected WACC 8.7%

Fastenal'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 Fastenal:

cost_of_equity (8.70%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.83) + 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.