GNTX
Gentex Corp
Price:  
21.78 
USD
Volume:  
1,857,899
United States | Auto Components

Gentex WACC - Weighted Average Cost of Capital

The WACC of Gentex Corp (GNTX) is 6.8%.

The Cost of Equity of Gentex Corp (GNTX) is 9.3%.
The Cost of Debt of Gentex Corp (GNTX) is 5%.

RangeSelected
Cost of equity8.2% - 10.4%9.3%
Tax rate14.1% - 14.7%14.4%
Cost of debt5.0% - 5.0%5%
WACC6.2% - 7.3%6.8%
WACC

Gentex WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta0.930.99
Additional risk adjustments0.0%0.5%
Cost of equity8.2%10.4%
Tax rate14.1%14.7%
Debt/Equity ratio
11
Cost of debt5.0%5.0%
After-tax WACC6.2%7.3%
Selected WACC6.8%

Gentex'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 Gentex:

cost_of_equity (9.30%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.93) + 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.