KN WACC - Weighted Average Cost of Capital

The WACC of Knowles Corp (KN) is 7.8%.

The Cost of Equity of Knowles Corp (KN) is 8.20%.

The Cost of Debt of Knowles Corp (KN) is 6.55%.

	Range	Selected
Cost of equity	6.50% - 9.90%	8.20%
Tax rate	26.20% - 27.00%	26.60%
Cost of debt	6.10% - 7.00%	6.55%
WACC	6.2% - 9.3%	7.8%

WACC

KN WACC calculation

Category	Low	High

Long-term bond rate	3.9%	4.4%
Equity market risk premium	4.6%	5.6%
Adjusted beta	0.57	0.9

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.50%	9.90%

Tax rate	26.20%	27.00%
Debt/Equity ratio	0.14	0.14
Cost of debt	6.10%	7.00%

After-tax WACC	6.2%	9.3%


Selected WACC	7.8%

KN'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 KN:

cost_of_equity (8.20%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.57) + 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.