MTW WACC - Weighted Average Cost of Capital
The WACC of Manitowoc Company Inc (MTW) is 9.4%.
| Range | Selected | |
| Cost of equity | 7.8% - 11.7% | 9.75% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 8.9% - 15.6% | 12.25% |
| WACC | 7.2% - 11.6% | 9.4% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.85 | 1.21 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.8% | 11.7% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 0.89 | 0.89 |
| Cost of debt | 8.9% | 15.6% |
| After-tax WACC | 7.2% | 11.6% |
| Selected WACC | 9.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| MTW | Manitowoc Company Inc | 0.89 | 1.97 | 1.19 |
| ALG | Alamo Group Inc | 0.08 | 0.78 | 0.74 |
| ASTE | Astec Industries Inc | 0.14 | 1.42 | 1.29 |
| BLBD | Blue Bird Corp | 0.07 | 0.93 | 0.89 |
| FSS | Federal Signal Corp | 0.03 | 1.22 | 1.19 |
| GBX | Greenbrier Companies Inc | 1.17 | 0.91 | 0.49 |
| HIMR | Hollund Industrial Marine Inc | 1044510 | -0.41 | 0 |
| KLS.TO | Kelso Technologies Inc | 0.02 | -0.65 | -0.64 |
| TRN | Trinity Industries Inc | 2.65 | 1.1 | 0.37 |
| WNC | Wabash National Corp | 0.98 | 0.76 | 0.45 |
| Low | High | |
| Unlevered beta | 0.47 | 0.8 |
| Relevered beta | 0.78 | 1.31 |
| Adjusted relevered beta | 0.85 | 1.21 |
MTW'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 MTW:
cost_of_equity (9.75%) = 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.