CBOE
Cboe Global Markets Inc
Price:  
213.53 
USD
Volume:  
1,671,740
United States | Capital Markets

CBOE WACC - Weighted Average Cost of Capital

The WACC of Cboe Global Markets Inc (CBOE) is 7.7%.

The Cost of Equity of Cboe Global Markets Inc (CBOE) is 7.95%.
The Cost of Debt of Cboe Global Markets Inc (CBOE) is 4.5%.

RangeSelected
Cost of equity6.6% - 9.3%7.95%
Tax rate29.3% - 29.7%29.5%
Cost of debt4.4% - 4.6%4.5%
WACC6.4% - 8.9%7.7%
WACC

CBOE WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta0.60.79
Additional risk adjustments0.0%0.5%
Cost of equity6.6%9.3%
Tax rate29.3%29.7%
Debt/Equity ratio
0.060.06
Cost of debt4.4%4.6%
After-tax WACC6.4%8.9%
Selected WACC7.7%

CBOE WACC - Detailed calculations of Beta

LowHigh
Unlevered beta0.540.71
Relevered beta0.40.69
Adjusted relevered beta0.60.79

CBOE'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 CBOE:

cost_of_equity (7.95%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.6) + 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.