KTB
Kontoor Brands Inc
Price:  
69.18 
USD
Volume:  
926,475.00
United States | Textiles, Apparel & Luxury Goods
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KTB WACC - Weighted Average Cost of Capital

The WACC of Kontoor Brands Inc (KTB) is 7.9%.

The Cost of Equity of Kontoor Brands Inc (KTB) is 8.80%.
The Cost of Debt of Kontoor Brands Inc (KTB) is 4.50%.

Range Selected
Cost of equity 7.60% - 10.00% 8.80%
Tax rate 17.20% - 19.10% 18.15%
Cost of debt 4.20% - 4.80% 4.50%
WACC 6.9% - 8.9% 7.9%
WACC

KTB WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.82 0.91
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.60% 10.00%
Tax rate 17.20% 19.10%
Debt/Equity ratio 0.21 0.21
Cost of debt 4.20% 4.80%
After-tax WACC 6.9% 8.9%
Selected WACC 7.9%

KTB'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 KTB:

cost_of_equity (8.80%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.82) + 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.