JBHT
J B Hunt Transport Services Inc
Price:  
130.87 
USD
Volume:  
837,686.00
United States | Road & Rail
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JBHT WACC - Weighted Average Cost of Capital

The WACC of J B Hunt Transport Services Inc (JBHT) is 8.1%.

The Cost of Equity of J B Hunt Transport Services Inc (JBHT) is 8.55%.
The Cost of Debt of J B Hunt Transport Services Inc (JBHT) is 4.55%.

Range Selected
Cost of equity 7.50% - 9.60% 8.55%
Tax rate 24.00% - 24.20% 24.10%
Cost of debt 4.50% - 4.60% 4.55%
WACC 7.1% - 9.0% 8.1%
WACC

JBHT WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.8 0.85
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.50% 9.60%
Tax rate 24.00% 24.20%
Debt/Equity ratio 0.11 0.11
Cost of debt 4.50% 4.60%
After-tax WACC 7.1% 9.0%
Selected WACC 8.1%

JBHT'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 JBHT:

cost_of_equity (8.55%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.8) + 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.