ATGE
Adtalem Global Education Inc
Price:  
118.77 
USD
Volume:  
285,380
United States | Diversified Consumer Services

ATGE WACC - Weighted Average Cost of Capital

The WACC of Adtalem Global Education Inc (ATGE) is 8.5%.

The Cost of Equity of Adtalem Global Education Inc (ATGE) is 9%.
The Cost of Debt of Adtalem Global Education Inc (ATGE) is 6.25%.

RangeSelected
Cost of equity7.7% - 10.3%9%
Tax rate13.3% - 16.1%14.7%
Cost of debt5.1% - 7.4%6.25%
WACC7.2% - 9.8%8.5%
WACC

ATGE WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta0.830.98
Additional risk adjustments0.0%0.5%
Cost of equity7.7%10.3%
Tax rate13.3%16.1%
Debt/Equity ratio
0.150.15
Cost of debt5.1%7.4%
After-tax WACC7.2%9.8%
Selected WACC8.5%

ATGE'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 ATGE:

cost_of_equity (9.00%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.83) + 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.