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Skywest Inc (SKYW) — WACC Analysis

WACC Breakdown

Skywest Inc (SKYW) has a weighted average cost of capital (WACC) of 7.6%. The cost of equity is 10.3%, derived from a beta of 1.28 and a risk-free rate of 5.2%. The after-tax cost of debt is 3.4%. The capital structure is 61.6% equity and 38.4% debt.

Interpretation

A WACC of 7.6% suggests that the market views Skywest Inc as relatively low-risk, with a lower cost of financing.

Investors can compare SKYW's WACC of 7.6% against industry peers to gauge its relative financing costs. A beta of 1.28 reflects the stock's volatility relative to the broader market.

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VALUATION

SKYW WACC: 7.65% for Skywest Inc

Current inputs imply a 10.26% cost of equity and a 4.36% pre-tax cost of debt. Use this discount rate as a starting point for DCF validation.

[01]Current Market Data
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WACC Calculation Process
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Market Data Loaded
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Company Data Fetched
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Beta Calculated (5Y)
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Inputs Auto-Populated
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WACC Calculated
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Step 2: Enter Ticker Symbol
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Step 4: Review Auto-Populated WACC Inputs

Values are automatically populated from real data. You can adjust them manually if needed.

4.30%
1.000
4.23%
5.00%
21.00%
70.00%
Debt: 30.00%Equity: 70.00%

Please enter a valid company ticker to calculate WACC

Skywest Inc Common Stock (SKYW) WACC Results
Weighted Average Cost of Capital
7.65%
Cost of Equity
10.26%
Risk-Free Rate5.24%
Beta1.28
Market Risk Premium4.23%
Cost of Debt
3.45%
Pre-Tax Cost of Debt4.36%
Tax Rate21.00%
Tax Shield0.92%
Capital Structure
Equity: 61.64%($3689.47M)
Debt: 38.36%($2296.46M)
Equity Component
6.32%
61.64% × 10.26%
Debt Component
1.32%
38.36% × 3.45%

Skywest Inc (SKYW) WACC in context

Skywest Inc (SKYW) currently screens with an estimated WACC of 7.65%. That blends a 10.26% cost of equity, a 4.36% pre-tax cost of debt, and a 61.64% equity weight into the discount rate you would typically use in a DCF model.

screens as a relatively low discount rate, which usually supports higher DCF values.

What SKYW WACC implies

A 7.65% discount rate screens as a relatively low discount rate, which usually supports higher DCF values.

How this page calculates SKYW

This page combines CAPM-based cost of equity with SEC-derived debt and capital structure inputs. The current beta is 1.28 and equity accounts for 61.64% of capital.

What to do next

Validate business quality on the company page, then carry the same discount-rate assumptions into the DCF page to test fair value sensitivity.

Disclaimer: This is not financial advice. Data sourced from SEC EDGAR and Polygon.io. Past performance does not guarantee future results. Always conduct your own research before making investment decisions.