MCCK WACC - Weighted Average Cost of Capital
The WACC of Mestek Inc (MCCK) is 7.0%.
| Range | Selected | |
| Cost of equity | 6.0% - 8.3% | 7.15% |
| Tax rate | 39.8% - 42.0% | 40.9% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.9% - 8.0% | 7.0% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.47 | 0.61 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.0% | 8.3% |
| Tax rate | 39.8% | 42.0% |
| Debt/Equity ratio | 0.05 | 0.05 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.9% | 8.0% |
| Selected WACC | 7.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| MCCK | Mestek Inc | 0.05 | 0.36 | 0.35 |
| DXYN | Dixie Group Inc | 8.46 | 0.74 | 0.12 |
| HELE | Helen of Troy Ltd | 1.47 | 0.14 | 0.07 |
| IRBT | iRobot Corp | 2.57 | 2 | 0.79 |
| NEPH | Nephros Inc | 0 | -0.74 | -0.74 |
| QEPC | QEP Co Inc | 0.01 | 0.49 | 0.49 |
| ROWC | Rowe Co | 8580.07 | 0.97 | 0 |
| VIOT | Viomi Technology Co Ltd | 0.41 | 1.04 | 0.83 |
| INDB.MI | Indel B SpA | 0.37 | 0.31 | 0.25 |
| Low | High | |
| Unlevered beta | 0.15 | 0.33 |
| Relevered beta | 0.21 | 0.42 |
| Adjusted relevered beta | 0.47 | 0.61 |
MCCK'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 MCCK:
cost_of_equity (7.15%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.47) + 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.