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Standard Motor Products (SMP) — WACC Analysis

WACC Breakdown

Standard Motor Products (SMP) has a weighted average cost of capital (WACC) of 6.7%. The cost of equity is 8.6%, derived from a beta of 0.71 and a risk-free rate of 5.2%. The after-tax cost of debt is 4.1%. The capital structure is 58.2% equity and 41.8% debt.

Interpretation

A WACC of 6.7% suggests that the market views Standard Motor Products as relatively low-risk, with a lower cost of financing.

Investors can compare SMP's WACC of 6.7% against industry peers to gauge its relative financing costs. A beta of 0.71 reflects the stock's volatility relative to the broader market.

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VALUATION

SMP WACC: 6.73% for Standard Motor Products

Current inputs imply a 8.63% cost of equity and a 5.16% pre-tax cost of debt. Use this discount rate as a starting point for DCF validation.

[01]Current Market Data
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[02]
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

Standard Motor Products Common Stock (SMP) WACC Results
Weighted Average Cost of Capital
6.73%
Cost of Equity
8.63%
Risk-Free Rate5.22%
Beta0.71
Market Risk Premium4.23%
Cost of Debt
4.07%
Pre-Tax Cost of Debt5.16%
Tax Rate21.00%
Tax Shield1.08%
Capital Structure
Equity: 58.18%($819.22M)
Debt: 41.82%($588.83M)
Equity Component
5.02%
58.18% × 8.63%
Debt Component
1.70%
41.82% × 4.07%

Standard Motor Products (SMP) WACC in context

Standard Motor Products (SMP) currently screens with an estimated WACC of 6.73%. That blends a 8.63% cost of equity, a 5.16% pre-tax cost of debt, and a 58.18% 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 SMP WACC implies

A 6.73% discount rate screens as a relatively low discount rate, which usually supports higher DCF values.

How this page calculates SMP

This page combines CAPM-based cost of equity with SEC-derived debt and capital structure inputs. The current beta is 0.71 and equity accounts for 58.18% 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.