MNRO
Monro Inc
Price:  
14.52 
USD
Volume:  
382,128.00
United States | Specialty Retail
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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 8.20%.
The Cost of Debt of Monro Inc (MNRO) is 5.75%.

Range Selected
Cost of equity 7.10% - 9.30% 8.20%
Tax rate 22.20% - 24.50% 23.35%
Cost of debt 4.00% - 7.50% 5.75%
WACC 5.2% - 7.6% 6.4%
WACC

MNRO WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.7 0.8
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.10% 9.30%
Tax rate 22.20% 24.50%
Debt/Equity ratio 0.9 0.9
Cost of debt 4.00% 7.50%
After-tax WACC 5.2% 7.6%
Selected WACC 6.4%

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 (8.20%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.7) + 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.