UFPT
UFP Technologies Inc
Price:  
234.68 
USD
Volume:  
111,405.00
United States | Containers & Packaging
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UFPT WACC - Weighted Average Cost of Capital

The WACC of UFP Technologies Inc (UFPT) is 8.9%.

The Cost of Equity of UFP Technologies Inc (UFPT) is 8.75%.
The Cost of Debt of UFP Technologies Inc (UFPT) is 12.95%.

Range Selected
Cost of equity 7.20% - 10.30% 8.75%
Tax rate 18.70% - 19.80% 19.25%
Cost of debt 4.80% - 21.10% 12.95%
WACC 6.9% - 11.0% 8.9%
WACC

UFPT WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.73 0.98
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.20% 10.30%
Tax rate 18.70% 19.80%
Debt/Equity ratio 0.11 0.11
Cost of debt 4.80% 21.10%
After-tax WACC 6.9% 11.0%
Selected WACC 8.9%

UFPT'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 UFPT:

cost_of_equity (8.75%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.73) + 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.