ODFL
Old Dominion Freight Line Inc
Price:  
155.59 
USD
Volume:  
1,173,920.00
United States | Road & Rail
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ODFL WACC - Weighted Average Cost of Capital

The WACC of Old Dominion Freight Line Inc (ODFL) is 8.1%.

The Cost of Equity of Old Dominion Freight Line Inc (ODFL) is 8.10%.
The Cost of Debt of Old Dominion Freight Line Inc (ODFL) is 4.25%.

Range Selected
Cost of equity 6.90% - 9.30% 8.10%
Tax rate 25.00% - 25.30% 25.15%
Cost of debt 4.00% - 4.50% 4.25%
WACC 6.9% - 9.3% 8.1%
WACC

ODFL WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.66 0.79
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.90% 9.30%
Tax rate 25.00% 25.30%
Debt/Equity ratio 0 0
Cost of debt 4.00% 4.50%
After-tax WACC 6.9% 9.3%
Selected WACC 8.1%

ODFL'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 ODFL:

cost_of_equity (8.10%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.66) + 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.