MG WACC - Weighted Average Cost of Capital

The WACC of Mistras Group Inc (MG) is 7.4%.

The Cost of Equity of Mistras Group Inc (MG) is 9.25%.

The Cost of Debt of Mistras Group Inc (MG) is 6.50%.

	Range	Selected
Cost of equity	7.80% - 10.70%	9.25%
Tax rate	18.20% - 24.80%	21.50%
Cost of debt	6.00% - 7.00%	6.50%
WACC	6.5% - 8.3%	7.4%

WACC

MG WACC calculation

Category	Low	High

Long-term bond rate	3.9%	4.4%
Equity market risk premium	4.6%	5.6%
Adjusted beta	0.85	1.04

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.80%	10.70%

Tax rate	18.20%	24.80%
Debt/Equity ratio	0.76	0.76
Cost of debt	6.00%	7.00%

After-tax WACC	6.5%	8.3%


Selected WACC	7.4%

MG'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 MG:

cost_of_equity (9.25%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.85) + 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.