QTS
QTS Realty Trust Inc
Price:  
77.98 
USD
Volume:  
1,401,810.00
United States | Equity Real Estate Investment Trusts (REITs)
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QTS WACC - Weighted Average Cost of Capital

The WACC of QTS Realty Trust Inc (QTS) is 6.1%.

The Cost of Equity of QTS Realty Trust Inc (QTS) is 6.40%.
The Cost of Debt of QTS Realty Trust Inc (QTS) is 8.30%.

Range Selected
Cost of equity 5.40% - 7.40% 6.40%
Tax rate 19.40% - 45.50% 32.45%
Cost of debt 4.00% - 12.60% 8.30%
WACC 4.9% - 7.3% 6.1%
WACC

QTS WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 4.2% 5.2%
Adjusted beta 0.54 0.62
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.40% 7.40%
Tax rate 19.40% 45.50%
Debt/Equity ratio 0.31 0.31
Cost of debt 4.00% 12.60%
After-tax WACC 4.9% 7.3%
Selected WACC 6.1%

QTS'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 QTS:

cost_of_equity (6.40%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (0.54) + 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.