MNRO
Monro Inc
Price:  
13.58 
USD
Volume:  
1,063,210
United States | Specialty Retail

MNRO WACC - Weighted Average Cost of Capital

The WACC of Monro Inc (MNRO) is 6.4%.

The Cost of Equity of Monro Inc (MNRO) is 8.35%.
The Cost of Debt of Monro Inc (MNRO) is 5.75%.

RangeSelected
Cost of equity7.3% - 9.4%8.35%
Tax rate22.2% - 24.5%23.35%
Cost of debt4.0% - 7.5%5.75%
WACC5.2% - 7.5%6.4%
WACC

MNRO WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta0.740.8
Additional risk adjustments0.0%0.5%
Cost of equity7.3%9.4%
Tax rate22.2%24.5%
Debt/Equity ratio
0.960.96
Cost of debt4.0%7.5%
After-tax WACC5.2%7.5%
Selected WACC6.4%

MNRO'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 MNRO:

cost_of_equity (8.35%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.74) + 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.