MAIN
Main Street Capital Corp
Price:  
53.83 
USD
Volume:  
677,105.00
United States | Capital Markets
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MAIN WACC - Weighted Average Cost of Capital

The WACC of Main Street Capital Corp (MAIN) is 7.4%.

The Cost of Equity of Main Street Capital Corp (MAIN) is 8.45%.
The Cost of Debt of Main Street Capital Corp (MAIN) is 5.50%.

Range Selected
Cost of equity 7.10% - 9.80% 8.45%
Tax rate 7.60% - 8.90% 8.25%
Cost of debt 4.90% - 6.10% 5.50%
WACC 6.3% - 8.5% 7.4%
WACC

MAIN WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.7 0.89
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.10% 9.80%
Tax rate 7.60% 8.90%
Debt/Equity ratio 0.45 0.45
Cost of debt 4.90% 6.10%
After-tax WACC 6.3% 8.5%
Selected WACC 7.4%

MAIN'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 MAIN:

cost_of_equity (8.45%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.7) + 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.