The WACC of Kimball International Inc (KBAL) is 12.8%.
Range | Selected | |
Cost of equity | 7.4% - 10.2% | 8.8% |
Tax rate | 25.7% - 31.0% | 28.35% |
Cost of debt | 4.5% - 108.9% | 56.7% |
WACC | 6.8% - 18.8% | 12.8% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 4.6% | 5.6% |
Adjusted beta | 0.76 | 0.95 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 7.4% | 10.2% |
Tax rate | 25.7% | 31.0% |
Debt/Equity ratio | 0.15 | 0.15 |
Cost of debt | 4.5% | 108.9% |
After-tax WACC | 6.8% | 18.8% |
Selected WACC | 12.8% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
KBAL | Kimball International Inc | 0.15 | -0.01 | -0.01 |
ACCO | ACCO Brands Corp | 2.59 | 1.15 | 0.4 |
ACU | Acme United Corp | 0.18 | 0.45 | 0.4 |
HNI | HNI Corp | 0.16 | 0.83 | 0.75 |
INQ.TO | Inscape Corp | 57.23 | 0.51 | 0.01 |
KNL | Knoll Inc | 0.24 | 2.07 | 1.76 |
MSA | MSA Safety Inc | 0.08 | 1.03 | 0.97 |
NL | NL Industries Inc | 0 | 1 | 1 |
TILE | Interface Inc | 0.25 | 0.82 | 0.69 |
VIRC | Virco Mfg. Corp | 0.03 | 1.2 | 1.18 |
Low | High | |
Unlevered beta | 0.58 | 0.84 |
Relevered beta | 0.64 | 0.93 |
Adjusted relevered beta | 0.76 | 0.95 |
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 KBAL:
cost_of_equity (8.80%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.76) + 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.