YELLQ WACC - Weighted Average Cost of Capital
The WACC of Yellow Corp (YELLQ) is 15.6%.
| Range | Selected | |
| Cost of equity | 95.7% - 140.2% | 117.95% |
| Tax rate | 12.2% - 21.4% | 16.8% |
| Cost of debt | 9.4% - 23.9% | 16.65% |
| WACC | 10.0% - 21.2% | 15.6% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 19.97 | 24.17 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 95.7% | 140.2% |
| Tax rate | 12.2% | 21.4% |
| Debt/Equity ratio | 49.17 | 49.17 |
| Cost of debt | 9.4% | 23.9% |
| After-tax WACC | 10.0% | 21.2% |
| Selected WACC | 15.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| YELLQ | Yellow Corp | 49.17 | -3.14 | -0.08 |
| CGIP | Celadon Group Inc | 149871.02 | 0.43 | 0 |
| CVLG | Covenant Logistics Group Inc | 0.44 | 1.17 | 0.86 |
| ODFL | Old Dominion Freight Line Inc | 0 | 1.04 | 1.04 |
| PTSI | PAM Transportation Services Inc | 0.61 | 1.29 | 0.86 |
| RRTS | Roadrunner Transportation Systems Inc | 2.37 | 1.69 | 0.57 |
| USX | US Xpress Enterprises Inc | 1.47 | 1.56 | 0.71 |
| Low | High | |
| Unlevered beta | 0.63 | 0.8 |
| Relevered beta | 29.31 | 35.58 |
| Adjusted relevered beta | 19.97 | 24.17 |
YELLQ'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 YELLQ:
cost_of_equity (117.95%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (19.97) + 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.