KAMN WACC - Weighted Average Cost of Capital
The WACC of Kaman Corp (KAMN) is 9.2%.
| Range | Selected | |
| Cost of equity | 10.1% - 13.2% | 11.65% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 8.2% - 10.3% | 9.2% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.36 | 1.48 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.1% | 13.2% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 0.43 | 0.43 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 8.2% | 10.3% |
| Selected WACC | 9.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| KAMN | Kaman Corp | 0.43 | 1.44 | 1.09 |
| ATRO | Astronics Corp | 0.13 | 0.7 | 0.64 |
| AVAV | AeroVironment Inc | 0 | 1.75 | 1.75 |
| AZ.V | A2Z Smart Technologies Corp | 0.06 | 1.33 | 1.27 |
| DCO | Ducommun Inc | 0.19 | 0.89 | 0.78 |
| EH | Ehang Holdings Ltd | 0.01 | 1.39 | 1.38 |
| HRX.TO | Heroux Devtek Inc | 0.2 | 0.21 | 0.18 |
| KTOS | Kratos Defense and Security Solutions Inc | 0.03 | 1.39 | 1.36 |
| MAL.TO | Magellan Aerospace Corp | 0.08 | 1.29 | 1.22 |
| VTSI | VirTra Inc | 0.11 | 1.76 | 1.63 |
| Low | High | |
| Unlevered beta | 1.17 | 1.3 |
| Relevered beta | 1.54 | 1.72 |
| Adjusted relevered beta | 1.36 | 1.48 |
KAMN'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 KAMN:
cost_of_equity (11.65%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.36) + 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.