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Amerco WACC %

:7.05% (As of Today)
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As of today (2022-08-17), Amerco's weighted average cost of capital is 7.05%. Amerco's ROIC % is 9.41% (calculated using TTM income statement data). Amerco generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.


Amerco WACC % Historical Data

The historical data trend for Amerco's WACC % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Amerco Annual Data
Trend Mar13 Mar14 Mar15 Mar16 Mar17 Mar18 Mar19 Mar20 Mar21 Mar22
WACC %
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 4.73 6.09 3.47 5.39 6.50

Amerco Quarterly Data
Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22
WACC % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 5.05 5.21 5.47 6.50 6.87

Competitive Comparison

For the Rental & Leasing Services subindustry, Amerco's WACC %, along with its competitors' market caps and WACC % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

   

Amerco WACC % Distribution

For the Business Services industry and Industrials sector, Amerco's WACC % distribution charts can be found below:

* The bar in red indicates where Amerco's WACC % falls into.



Amerco WACC % Calculation

The weighted average cost of capital (WACC) is the rate that a company is expected to pay on average to all its security holders to finance its assets. The WACC is commonly referred to as the firm's cost of capital. Generally speaking, a company's assets are financed by debt and equity. WACC is the average of the costs of these sources of financing, each of which is weighted by its respective use in the given situation. By taking a weighted average, we can see how much interest the company has to pay for every dollar it finances.

WACC=E/(E + D)*Cost of Equity+D/(E + D)*Cost of Debt*(1 - Tax Rate)

1. Weights:
Generally speaking, a company's assets are financed by debt and equity. We need to calculate the weight of equity and the weight of debt.
The market value of equity (E) is also called "Market Cap". As of today, Amerco's market capitalization (E) is $11581.340 Mil.
The market value of debt is typically difficult to calculate, therefore, GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding the latest two-year average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together. As of Jun. 2022, Amerco's latest two-year average Short-Term Debt & Capital Lease Obligation was $0 Mil and its latest two-year average Long-Term Debt & Capital Lease Obligation was $5429.0555 Mil. The total Book Value of Debt (D) is $5429.0555 Mil.
a) weight of equity = E / (E + D) = 11581.340 / (11581.340 + 5429.0555) = 0.6808
b) weight of debt = D / (E + D) = 5429.0555 / (11581.340 + 5429.0555) = 0.3192

2. Cost of Equity:
GuruFocus uses Capital Asset Pricing Model (CAPM) to calculate the required rate of return. The formula is:
Cost of Equity = Risk-Free Rate of Return + Beta of Asset * (Expected Return of the Market - Risk-Free Rate of Return)
a) GuruFocus uses 10-Year Treasury Constant Maturity Rate as the risk-free rate. It is updated daily. The current risk-free rate is 2.86900000%. Please go to Economic Indicators page for more information. Please note that we use the 10-Year Treasury Constant Maturity Rate of the country/region where the company is headquartered. If the data for that country/region is not available, then we will use the 10-Year Treasury Constant Maturity Rate of the United States as default.
b) Beta is the sensitivity of the expected excess asset returns to the expected excess market returns. Amerco's beta is 1.07.
c) (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
Cost of Equity = 2.86900000% + 1.07 * 6% = 9.289%

3. Cost of Debt:
GuruFocus uses last fiscal year end Interest Expense divided by the latest two-year average debt to get the simplified cost of debt.
As of Mar. 2022, Amerco's interest expense (positive number) was $161.868 Mil. Its total Book Value of Debt (D) is $5429.0555 Mil.
Cost of Debt = 161.868 / 5429.0555 = 2.9815%.

4. Multiply by one minus Average Tax Rate:
GuruFocus uses the latest two-year average tax rate to do the calculation. The calculated average tax rate is limited to between 0% and 100%. If the calculated average tax rate is higher than 100%, it is set to 100%. If the calculated average tax rate is less than 0%, it is set to 0%.
The latest Two-year Average Tax Rate is 23.595%.

Amerco's Weighted Average Cost Of Capital (WACC) for Today is calculated as:

WACC=E / (E + D)*Cost of Equity+D / (E + D)*Cost of Debt*(1 - Tax Rate)
=0.6808*9.289%+0.3192*2.9815%*(1 - 23.595%)
=7.05%

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Amerco  (NAS:UHAL) WACC % Explanation

Because it costs money to raise capital. A firm that generates higher ROIC % than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.

As of today, Amerco's weighted average cost of capital is 7.05%. Amerco's ROIC % is 9.41% (calculated using TTM income statement data). Amerco generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.


Be Aware

1. GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding latest two-year average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together.

2. The WACC formula discussed above does not include Preferred Stock. Please adjust if preferred stock is considered.

3. (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.

4. GuruFocus uses last fiscal year end Interest Expense divided by the latest two-year average debt to get the simplified cost of debt.


Related Terms

Amerco Business Description

Amerco logo
Traded in Other Exchanges
Address
5555 Kietzke Lane, Suite 100, Reno, NV, USA, 89511
Amerco Inc is an American provider of rental trucks to household movers. The company operates a fleet of trucks, trailers, and towing devices under the U-Haul brand. The service is targeted at do-it-yourself household movers. Amerco offers its products and services through a network of retail moving stores and independent U-Haul dealers. The company also offers self-storage solutions for household and commercial goods, as well as insurance products covering loss on goods in storage, medical, life, and cargo protection. It operates in three segments: Moving and Storage, Property and Casualty Insurance, and Life Insurance.
Executives
Martz Carrie other: Advisory Board Member 21335 N. 74TH WAY SCOTTSDALE AZ 85225
Shoen Edward J director, 10 percent owner, officer: Chairman/President 2727 N CENTRAL AVE PHOENIX AZ 85004
Shoen Mark V 10 percent owner 2727 N CENTRAL AVE PHOENIX AZ 85004
Willow Grove Holdings Lp 10 percent owner 1250 E. MISSOURI AVE PHOENIX AZ 85014
Foster Road Llc 10 percent owner 1250 E. MISSOURI AVE PHOENIX AZ 85014
Bell Maria Lourdes officer: Chief Accounting Officer 2727 N. CENTRAL AVE PHOENIX AZ 85004
Braccia Matthew officer: Pres-Amerco Real Estate Co. 2727 N. CENTRAL AVE. PHOENIX AZ 85004
Hayes Thomas W other: Ind. Gov Committee Member C/O FREMONT GENERAL CORP 2020 SANTA MONICA BLVD #600 SANTA MONICA CA 90404
Vizcarra Carlos officer: Pres-Amerco Real Estate Co 2727 N CENTRAL AVE PHOENIX AZ 85004
Herrera Richard Jay director 21 BRILLIANT SKY DRIVE SANTE FE NM 87508
Hillman Amy J other: Ind. Gov. Committee Member C/O CDK GLOBAL, INC., 1950 HASSELL RD. HOFFMAN ESTATES IL 60169
Shank Roberta Roberts other: Advisory Board Member 20002 NORTH 19TH AVENUE PHOENIX AZ 85027
Grogan James J director 2727 N CENTRAL AVENUE PHOENIX AZ 85004
Schmidt Karl A. director 600 HERITAGE RD. DE PERE WI 54115
Thompson Mary K officer: Chief Accounting Officer 2727 N CENTRAL AVE PHOENIX AZ 85004

Amerco Headlines

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