KMI
Kinder Morgan Inc
Price:  
28.09 
USD
Volume:  
12,398,444.00
United States | Oil, Gas & Consumable Fuels
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KMI WACC - Weighted Average Cost of Capital

The WACC of Kinder Morgan Inc (KMI) is 7.3%.

The Cost of Equity of Kinder Morgan Inc (KMI) is 8.40%.
The Cost of Debt of Kinder Morgan Inc (KMI) is 6.30%.

Range Selected
Cost of equity 7.40% - 9.40% 8.40%
Tax rate 20.80% - 21.70% 21.25%
Cost of debt 5.10% - 7.50% 6.30%
WACC 6.3% - 8.2% 7.3%
WACC

KMI WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.78 0.82
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.40% 9.40%
Tax rate 20.80% 21.70%
Debt/Equity ratio 0.51 0.51
Cost of debt 5.10% 7.50%
After-tax WACC 6.3% 8.2%
Selected WACC 7.3%

KMI'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 KMI:

cost_of_equity (8.40%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.78) + 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.