KNX
Knight-Swift Transportation Holdings Inc
Price:  
41.45 
USD
Volume:  
3,852,496.00
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 8.2%.

The Cost of Equity of Knight-Swift Transportation Holdings Inc (KNX) is 9.35%.
The Cost of Debt of Knight-Swift Transportation Holdings Inc (KNX) is 6.75%.

Range Selected
Cost of equity 8.20% - 10.50% 9.35%
Tax rate 23.10% - 24.00% 23.55%
Cost of debt 4.40% - 9.10% 6.75%
WACC 6.9% - 9.5% 8.2%
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 0.95 1
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.20% 10.50%
Tax rate 23.10% 24.00%
Debt/Equity ratio 0.38 0.38
Cost of debt 4.40% 9.10%
After-tax WACC 6.9% 9.5%
Selected WACC 8.2%

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 (9.35%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.95) + 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.