KFRC
Kforce Inc
Price:  
43.75 
USD
Volume:  
58,429.00
United States | Professional Services
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KFRC WACC - Weighted Average Cost of Capital

The WACC of Kforce Inc (KFRC) is 7.5%.

The Cost of Equity of Kforce Inc (KFRC) is 7.65%.
The Cost of Debt of Kforce Inc (KFRC) is 4.25%.

Range Selected
Cost of equity 6.80% - 8.50% 7.65%
Tax rate 25.30% - 25.90% 25.60%
Cost of debt 4.00% - 4.50% 4.25%
WACC 6.6% - 8.3% 7.5%
WACC

KFRC WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.63 0.66
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.80% 8.50%
Tax rate 25.30% 25.90%
Debt/Equity ratio 0.04 0.04
Cost of debt 4.00% 4.50%
After-tax WACC 6.6% 8.3%
Selected WACC 7.5%

KFRC'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 KFRC:

cost_of_equity (7.65%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.63) + 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.