The WACC of Cboe Global Markets Inc (CBOE) is 7.7%.
Range | Selected | |
Cost of equity | 6.6% - 9.3% | 7.95% |
Tax rate | 29.3% - 29.7% | 29.5% |
Cost of debt | 4.4% - 4.6% | 4.5% |
WACC | 6.4% - 8.9% | 7.7% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 4.6% | 5.6% |
Adjusted beta | 0.6 | 0.79 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 6.6% | 9.3% |
Tax rate | 29.3% | 29.7% |
Debt/Equity ratio | 0.06 | 0.06 |
Cost of debt | 4.4% | 4.6% |
After-tax WACC | 6.4% | 8.9% |
Selected WACC | 7.7% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
CBOE | Cboe Global Markets Inc | 0.06 | -0.39 | -0.38 |
CG | Carlyle Group Inc | 0.59 | 1.54 | 1.08 |
CME | CME Group Inc | 0.03 | 0.17 | 0.17 |
EQOS | Diginex Ltd | 1.15 | 1.67 | 0.92 |
ICE | Intercontinental Exchange Inc | 0.2 | 0.69 | 0.6 |
MORN | Morningstar Inc | 0.05 | 0.92 | 0.89 |
NDAQ | Nasdaq Inc | 0.21 | 0.84 | 0.73 |
OTCM | OTC Markets Group Inc | 0.87 | 0.03 | 0.02 |
X.TO | TMX Group Ltd | 0.14 | 0.58 | 0.52 |
Low | High | |
Unlevered beta | 0.54 | 0.71 |
Relevered beta | 0.4 | 0.69 |
Adjusted relevered beta | 0.6 | 0.79 |
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.