MODV
ModivCare Inc
Price:  
1.35 
USD
Volume:  
289,805.00
United States | Health Care Providers & Services
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MODV WACC - Weighted Average Cost of Capital

The WACC of ModivCare Inc (MODV) is 14.0%.

The Cost of Equity of ModivCare Inc (MODV) is 119.25%.
The Cost of Debt of ModivCare Inc (MODV) is 15.25%.

Range Selected
Cost of equity 53.30% - 185.20% 119.25%
Tax rate 13.80% - 21.20% 17.50%
Cost of debt 6.60% - 23.90% 15.25%
WACC 6.4% - 21.5% 14.0%
WACC

MODV WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 10.76 32.2
Additional risk adjustments 0.0% 0.5%
Cost of equity 53.30% 185.20%
Tax rate 13.80% 21.20%
Debt/Equity ratio 60.22 60.22
Cost of debt 6.60% 23.90%
After-tax WACC 6.4% 21.5%
Selected WACC 14.0%

MODV'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 MODV:

cost_of_equity (119.25%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (10.76) + 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.