VMI
Valmont Industries Inc
Price:  
341.58 
USD
Volume:  
142,373
United States | Construction & Engineering

VMI WACC - Weighted Average Cost of Capital

The WACC of Valmont Industries Inc (VMI) is 9.0%.

The Cost of Equity of Valmont Industries Inc (VMI) is 9.55%.
The Cost of Debt of Valmont Industries Inc (VMI) is 5%.

RangeSelected
Cost of equity8.4% - 10.7%9.55%
Tax rate25.5% - 27.4%26.45%
Cost of debt4.6% - 5.4%5%
WACC7.9% - 10.0%9.0%
WACC

VMI WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta0.981.04
Additional risk adjustments0.0%0.5%
Cost of equity8.4%10.7%
Tax rate25.5%27.4%
Debt/Equity ratio
0.110.11
Cost of debt4.6%5.4%
After-tax WACC7.9%10.0%
Selected WACC9.0%

VMI'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 VMI:

cost_of_equity (9.55%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.98) + 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.