KNX
Knight-Swift Transportation Holdings Inc
Price:  
40.36 
USD
Volume:  
1,720,604.00
United States | Road & Rail
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KNX WACC - Weighted Average Cost of Capital

The WACC of Knight-Swift Transportation Holdings Inc (KNX) is 7.9%.

The Cost of Equity of Knight-Swift Transportation Holdings Inc (KNX) is 9.10%.
The Cost of Debt of Knight-Swift Transportation Holdings Inc (KNX) is 5.95%.

Range Selected
Cost of equity 8.10% - 10.10% 9.10%
Tax rate 23.10% - 24.00% 23.55%
Cost of debt 4.40% - 7.50% 5.95%
WACC 6.8% - 9.0% 7.9%
WACC

KNX WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.91 0.94
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.10% 10.10%
Tax rate 23.10% 24.00%
Debt/Equity ratio 0.36 0.36
Cost of debt 4.40% 7.50%
After-tax WACC 6.8% 9.0%
Selected WACC 7.9%

KNX'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 KNX:

cost_of_equity (9.10%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.91) + 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.