FWRD
Forward Air Corp
Price:  
16.75 
USD
Volume:  
519,080.00
United States | Air Freight & Logistics
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FWRD WACC - Weighted Average Cost of Capital

The WACC of Forward Air Corp (FWRD) is 10.6%.

The Cost of Equity of Forward Air Corp (FWRD) is 8.15%.
The Cost of Debt of Forward Air Corp (FWRD) is 15.05%.

Range Selected
Cost of equity 6.00% - 10.30% 8.15%
Tax rate 24.20% - 24.70% 24.45%
Cost of debt 6.20% - 23.90% 15.05%
WACC 5.0% - 16.1% 10.6%
WACC

FWRD WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.47 0.97
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.00% 10.30%
Tax rate 24.20% 24.70%
Debt/Equity ratio 3.2 3.2
Cost of debt 6.20% 23.90%
After-tax WACC 5.0% 16.1%
Selected WACC 10.6%

FWRD'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 FWRD:

cost_of_equity (8.15%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.47) + 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.