PTSI
PAM Transportation Services Inc
Price:  
19.72 
USD
Volume:  
25,826.00
United States | Road & Rail
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PTSI WACC - Weighted Average Cost of Capital

The WACC of PAM Transportation Services Inc (PTSI) is 9.8%.

The Cost of Equity of PAM Transportation Services Inc (PTSI) is 10.10%.
The Cost of Debt of PAM Transportation Services Inc (PTSI) is 12.45%.

Range Selected
Cost of equity 8.80% - 11.40% 10.10%
Tax rate 23.90% - 24.50% 24.20%
Cost of debt 4.00% - 20.90% 12.45%
WACC 6.6% - 13.1% 9.8%
WACC

PTSI WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.07 1.17
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.80% 11.40%
Tax rate 23.90% 24.50%
Debt/Equity ratio 0.61 0.61
Cost of debt 4.00% 20.90%
After-tax WACC 6.6% 13.1%
Selected WACC 9.8%

PTSI'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 PTSI:

cost_of_equity (10.10%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.07) + 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.