MEG
Montrose Environmental Group Inc
Price:  
22.99 
USD
Volume:  
213,795.00
United States | Commercial Services & Supplies
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MEG WACC - Weighted Average Cost of Capital

The WACC of Montrose Environmental Group Inc (MEG) is 7.0%.

The Cost of Equity of Montrose Environmental Group Inc (MEG) is 7.40%.
The Cost of Debt of Montrose Environmental Group Inc (MEG) is 5.95%.

Range Selected
Cost of equity 6.40% - 8.40% 7.40%
Tax rate 5.60% - 7.40% 6.50%
Cost of debt 4.90% - 7.00% 5.95%
WACC 6.0% - 7.9% 7.0%
WACC

MEG WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.56 0.63
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.40% 8.40%
Tax rate 5.60% 7.40%
Debt/Equity ratio 0.3 0.3
Cost of debt 4.90% 7.00%
After-tax WACC 6.0% 7.9%
Selected WACC 7.0%

MEG'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 MEG:

cost_of_equity (7.40%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.56) + 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.