YETI
Yeti Holdings Inc
Price:  
28.84 
USD
Volume:  
4,007,504.00
United States | Leisure Products
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YETI WACC - Weighted Average Cost of Capital

The WACC of Yeti Holdings Inc (YETI) is 8.5%.

The Cost of Equity of Yeti Holdings Inc (YETI) is 8.65%.
The Cost of Debt of Yeti Holdings Inc (YETI) is 4.50%.

Range Selected
Cost of equity 7.50% - 9.80% 8.65%
Tax rate 23.60% - 24.30% 23.95%
Cost of debt 4.50% - 4.50% 4.50%
WACC 7.4% - 9.6% 8.5%
WACC

YETI WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.8 0.88
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.50% 9.80%
Tax rate 23.60% 24.30%
Debt/Equity ratio 0.03 0.03
Cost of debt 4.50% 4.50%
After-tax WACC 7.4% 9.6%
Selected WACC 8.5%

YETI'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 YETI:

cost_of_equity (8.65%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.8) + 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.