Quaker WACC - Weighted Average Cost of Capital
The WACC of Quaker Chemical Corp (KWR) is 7.8%.
| Range | Selected | |
| Cost of equity | 8.0% - 10.8% | 9.4% |
| Tax rate | 28.6% - 33.6% | 31.1% |
| Cost of debt | 4.3% - 5.3% | 4.8% |
| WACC | 6.7% - 8.9% | 7.8% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.9 | 1.06 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.0% | 10.8% |
| Tax rate | 28.6% | 33.6% |
| Debt/Equity ratio | 0.35 | 0.35 |
| Cost of debt | 4.3% | 5.3% |
| After-tax WACC | 6.7% | 8.9% |
| Selected WACC | 7.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| KWR | Quaker Chemical Corp | 0.35 | 1.05 | 0.85 |
| BCPC | Balchem Corp | 0.04 | 0.54 | 0.53 |
| ESI | Element Solutions Inc | 0.33 | 1.21 | 0.98 |
| GCP | GCP Applied Technologies Inc | 0.15 | 0.75 | 0.68 |
| GRA | W R Grace & Co | 0.43 | 1.44 | 1.11 |
| MTX | Minerals Technologies Inc | 0.55 | 0.95 | 0.69 |
| NEU | NewMarket Corp | 0.15 | 0.6 | 0.55 |
| NGVT | Ingevity Corp | 0.89 | 1.58 | 0.99 |
| SCL | Stepan Co | 0.5 | 1.23 | 0.92 |
| SXT | Sensient Technologies Corp | 0.15 | 0.63 | 0.57 |
| Low | High | |
| Unlevered beta | 0.69 | 0.88 |
| Relevered beta | 0.85 | 1.09 |
| Adjusted relevered beta | 0.9 | 1.06 |
Quaker'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 Quaker:
cost_of_equity (9.40%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.9) + 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.