ACIW
ACI Worldwide Inc
Price:  
46.21 
USD
Volume:  
438,478
United States | Software

ACIW WACC - Weighted Average Cost of Capital

The WACC of ACI Worldwide Inc (ACIW) is 9.6%.

The Cost of Equity of ACI Worldwide Inc (ACIW) is 10.7%.
The Cost of Debt of ACI Worldwide Inc (ACIW) is 5.25%.

RangeSelected
Cost of equity9.4% - 12.0%10.7%
Tax rate23.4% - 26.6%25%
Cost of debt5.1% - 5.4%5.25%
WACC8.5% - 10.7%9.6%
WACC

ACIW WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta1.21.28
Additional risk adjustments0.0%0.5%
Cost of equity9.4%12.0%
Tax rate23.4%26.6%
Debt/Equity ratio
0.190.19
Cost of debt5.1%5.4%
After-tax WACC8.5%10.7%
Selected WACC9.6%

ACIW'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 ACIW:

cost_of_equity (10.70%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.2) + 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.