Visteon WACC - Weighted Average Cost of Capital
The WACC of Visteon Corp (VC) is 7.4%.
| Range | Selected | |
| Cost of equity | 6.5% - 9.6% | 8.05% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 6.0% - 8.9% | 7.4% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.57 | 0.85 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.5% | 9.6% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 0.14 | 0.14 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 6.0% | 8.9% |
| Selected WACC | 7.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| VC | Visteon Corp | 0.14 | 0.53 | 0.48 |
| DAN | Dana Inc | 1.15 | 1.6 | 0.87 |
| OMTK | Omnitek Engineering Corp | 0.59 | 0.11 | 0.08 |
| QS | Quantumscape Corp | 0.02 | 1.13 | 1.12 |
| SSA.V | Spectra Products Inc | 0.07 | 0.63 | 0.6 |
| STRT | Strattec Security Corp | 0.08 | 1.35 | 1.28 |
| TRBD | Turbodyne Technologies Inc | 729.16 | 0 | 0 |
| WARM | Cool Technologies Inc | 4232.52 | 0 | 0 |
| 1316.HK | Nexteer Automotive Group Ltd | 0.05 | 1.7 | 1.63 |
| Low | High | |
| Unlevered beta | 0.51 | 0.82 |
| Relevered beta | 0.36 | 0.78 |
| Adjusted relevered beta | 0.57 | 0.85 |
Visteon'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 Visteon:
cost_of_equity (8.05%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.57) + 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.