AGO
Assured Guaranty Ltd
Price:  
90.18 
USD
Volume:  
236,168.00
Bermuda | Insurance
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AGO WACC - Weighted Average Cost of Capital

The WACC of Assured Guaranty Ltd (AGO) is 7.5%.

The Cost of Equity of Assured Guaranty Ltd (AGO) is 8.70%.
The Cost of Debt of Assured Guaranty Ltd (AGO) is 5.00%.

Range Selected
Cost of equity 7.40% - 10.00% 8.70%
Tax rate 11.70% - 12.90% 12.30%
Cost of debt 5.00% - 5.00% 5.00%
WACC 6.6% - 8.5% 7.5%
WACC

AGO WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.77 0.92
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.40% 10.00%
Tax rate 11.70% 12.90%
Debt/Equity ratio 0.38 0.38
Cost of debt 5.00% 5.00%
After-tax WACC 6.6% 8.5%
Selected WACC 7.5%

AGO'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 AGO:

cost_of_equity (8.70%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.77) + 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.