PKE
Park Aerospace Corp
Price:  
15.29 
USD
Volume:  
64,574.00
United States | Aerospace & Defense
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PKE WACC - Weighted Average Cost of Capital

The WACC of Park Aerospace Corp (PKE) is 6.7%.

The Cost of Equity of Park Aerospace Corp (PKE) is 9.65%.
The Cost of Debt of Park Aerospace Corp (PKE) is 5.00%.

Range Selected
Cost of equity 7.30% - 12.00% 9.65%
Tax rate 25.20% - 28.40% 26.80%
Cost of debt 5.00% - 5.00% 5.00%
WACC 5.5% - 7.8% 6.7%
WACC

PKE WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.75 1.28
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.30% 12.00%
Tax rate 25.20% 28.40%
Debt/Equity ratio 1 1
Cost of debt 5.00% 5.00%
After-tax WACC 5.5% 7.8%
Selected WACC 6.7%

PKE'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 PKE:

cost_of_equity (9.65%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.75) + 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.