MESA
Mesa Air Group Inc
Price:  
1.37 
USD
Volume:  
35,736.00
United States | Airlines
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MESA WACC - Weighted Average Cost of Capital

The WACC of Mesa Air Group Inc (MESA) is 9.8%.

The Cost of Equity of Mesa Air Group Inc (MESA) is 18.45%.
The Cost of Debt of Mesa Air Group Inc (MESA) is 10.40%.

Range Selected
Cost of equity 13.60% - 23.30% 18.45%
Tax rate 16.00% - 23.60% 19.80%
Cost of debt 5.20% - 15.60% 10.40%
WACC 5.8% - 13.7% 9.8%
WACC

MESA WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 2.12 3.29
Additional risk adjustments 0.0% 0.5%
Cost of equity 13.60% 23.30%
Tax rate 16.00% 23.60%
Debt/Equity ratio 5.41 5.41
Cost of debt 5.20% 15.60%
After-tax WACC 5.8% 13.7%
Selected WACC 9.8%

MESA'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 MESA:

cost_of_equity (18.45%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (2.12) + 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.