MESA
Mesa Air Group Inc
Price:  
0.93 
USD
Volume:  
94,188.00
United States | Airlines
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MESA WACC - Weighted Average Cost of Capital

The WACC of Mesa Air Group Inc (MESA) is 7.0%.

The Cost of Equity of Mesa Air Group Inc (MESA) is 23.70%.
The Cost of Debt of Mesa Air Group Inc (MESA) is 6.10%.

Range Selected
Cost of equity 19.20% - 28.20% 23.70%
Tax rate 16.00% - 23.60% 19.80%
Cost of debt 5.20% - 7.00% 6.10%
WACC 6.0% - 7.9% 7.0%
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 3.33 4.17
Additional risk adjustments 0.0% 0.5%
Cost of equity 19.20% 28.20%
Tax rate 16.00% 23.60%
Debt/Equity ratio 7.82 7.82
Cost of debt 5.20% 7.00%
After-tax WACC 6.0% 7.9%
Selected WACC 7.0%

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 (23.70%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (3.33) + 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.