Kratos Defense and Security Solutions Inc (KTOS) WACC Analysis

As of June 10, 2025, Kratos Defense and Security Solutions Inc (KTOS) carries a Weighted Average Cost of Capital (WACC) of 8.5%. WACC reflects the blended rate Kratos Defense and Security Solutions Inc must pay to both equity and debt holders.

Within that, the cost of equity is 7.2%, the cost of debt is 5.4%, and the effective tax rate is 26.2%.

Breakdown of WACC Components

• Long-term bond rate: 3.9% – 4.4%
• Equity market risk premium: 4.6% – 5.6%
• Adjusted beta: 0.74 – 0.93
• Additional risk adjustment: 0.0% – 0.5%
• Debt-to-equity ratio: 0.04

What It Means for Investors

With a selected WACC of 8.5%, Kratos Defense and Security Solutions Inc must ensure any new investment returns exceed this threshold to generate shareholder value. This level reflects a moderate financing cost structure.