BKI
Black Knight Inc
Price:  
75.76 
USD
Volume:  
7,483,520.00
United States | IT Services
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BKI WACC - Weighted Average Cost of Capital

The WACC of Black Knight Inc (BKI) is 7.8%.

The Cost of Equity of Black Knight Inc (BKI) is 8.55%.
The Cost of Debt of Black Knight Inc (BKI) is 5.75%.

Range Selected
Cost of equity 7.30% - 9.80% 8.55%
Tax rate 17.70% - 18.40% 18.05%
Cost of debt 4.00% - 7.50% 5.75%
WACC 6.6% - 9.1% 7.8%
WACC

BKI WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.75 0.88
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.30% 9.80%
Tax rate 17.70% 18.40%
Debt/Equity ratio 0.22 0.22
Cost of debt 4.00% 7.50%
After-tax WACC 6.6% 9.1%
Selected WACC 7.8%

BKI'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 BKI:

cost_of_equity (8.55%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.75) + 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.