The WACC of Maxar Technologies Inc (MAXR) is 10.6%.
Range | Selected | |
Cost of equity | 7.5% - 11.0% | 9.25% |
Tax rate | 6.0% - 16.6% | 11.3% |
Cost of debt | 6.4% - 23.9% | 15.15% |
WACC | 6.9% - 14.2% | 10.6% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 4.6% | 5.6% |
Adjusted beta | 0.79 | 1.1 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 7.5% | 11.0% |
Tax rate | 6.0% | 16.6% |
Debt/Equity ratio | 0.57 | 0.57 |
Cost of debt | 6.4% | 23.9% |
After-tax WACC | 6.9% | 14.2% |
Selected WACC | 10.6% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
MAXR | Maxar Technologies Inc | 0.57 | 0.87 | 0.56 |
AIRI | Air Industries Group | 1.94 | 0.97 | 0.34 |
AJRD | Aerojet Rocketdyne Holdings Inc | 0.06 | 0.54 | 0.51 |
CW | Curtiss-Wright Corp | 0.06 | 1.27 | 1.21 |
ETCC | Environmental Tectonics Corp | 0.98 | 0.53 | 0.27 |
HRX.TO | Heroux Devtek Inc | 0.2 | 0.21 | 0.17 |
HXL | Hexcel Corp | 0.15 | 1.16 | 1.02 |
KAMN | Kaman Corp | 0.43 | 1.44 | 1.03 |
KTOS | Kratos Defense and Security Solutions Inc | 0.03 | 1.39 | 1.35 |
TGI | Triumph Group Inc | 0.49 | 0.5 | 0.35 |
Low | High | |
Unlevered beta | 0.45 | 0.75 |
Relevered beta | 0.69 | 1.15 |
Adjusted relevered beta | 0.79 | 1.1 |
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 Maxar:
cost_of_equity (9.25%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.79) + 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.