ACIW
ACI Worldwide Inc
Price:  
48.87 
USD
Volume:  
734,445.00
United States | Software
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ACIW WACC - Weighted Average Cost of Capital

The WACC of ACI Worldwide Inc (ACIW) is 9.7%.

The Cost of Equity of ACI Worldwide Inc (ACIW) is 10.75%.
The Cost of Debt of ACI Worldwide Inc (ACIW) is 5.25%.

Range Selected
Cost of equity 9.40% - 12.10% 10.75%
Tax rate 23.40% - 26.60% 25.00%
Cost of debt 5.10% - 5.40% 5.25%
WACC 8.5% - 10.8% 9.7%
WACC

ACIW WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.2 1.29
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.40% 12.10%
Tax rate 23.40% 26.60%
Debt/Equity ratio 0.18 0.18
Cost of debt 5.10% 5.40%
After-tax WACC 8.5% 10.8%
Selected WACC 9.7%

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 (10.75%) = 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.