YELL WACC - Weighted Average Cost of Capital

The WACC of Yellow Corp (YELL) is 12.6%.

The Cost of Equity of Yellow Corp (YELL) is 43.50%.

The Cost of Debt of Yellow Corp (YELL) is 12.95%.

	Range	Selected
Cost of equity	38.30% - 48.70%	43.50%
Tax rate	14.80% - 19.60%	17.20%
Cost of debt	8.90% - 17.00%	12.95%
WACC	9.4% - 15.7%	12.6%

WACC

YELL WACC calculation

Category	Low	High

Long-term bond rate	4.2%	4.7%
Equity market risk premium	5.0%	6.0%
Adjusted beta	6.83	7.26

Additional risk adjustments	0.0%	0.5%
Cost of equity	38.30%	48.70%

Tax rate	14.80%	19.60%
Debt/Equity ratio	15.91	15.91
Cost of debt	8.90%	17.00%

After-tax WACC	9.4%	15.7%


Selected WACC	12.6%

YELL'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 YELL:

cost_of_equity (43.50%) = risk_free_rate (4.45%) + equity_risk_premium (5.50%) * adjusted_beta (6.83) + 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.