VSTO
Vista Outdoor Inc
Price:  
44.63 
USD
Volume:  
1,613,424
United States | Leisure Products

VSTO WACC - Weighted Average Cost of Capital

The WACC of Vista Outdoor Inc (VSTO) is 7.9%.

The Cost of Equity of Vista Outdoor Inc (VSTO) is 9.25%.
The Cost of Debt of Vista Outdoor Inc (VSTO) is 4.25%.

RangeSelected
Cost of equity8.0% - 10.5%9.25%
Tax rate18.0% - 39.1%28.55%
Cost of debt4.0% - 4.5%4.25%
WACC7.0% - 8.8%7.9%
WACC

VSTO WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta0.91
Additional risk adjustments0.0%0.5%
Cost of equity8.0%10.5%
Tax rate18.0%39.1%
Debt/Equity ratio
0.280.28
Cost of debt4.0%4.5%
After-tax WACC7.0%8.8%
Selected WACC7.9%

VSTO'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 VSTO:

cost_of_equity (9.25%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.9) + 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.