CCL
Carnival Corp
Price:  
29.96 
USD
Volume:  
20,050,700.00
United States | Hotels, Restaurants & Leisure
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Carnival WACC - Weighted Average Cost of Capital

The WACC of Carnival Corp (CCL) is 8.6%.

The Cost of Equity of Carnival Corp (CCL) is 10.45%.
The Cost of Debt of Carnival Corp (CCL) is 6.00%.

Range Selected
Cost of equity 8.40% - 12.50% 10.45%
Tax rate 0.20% - 0.20% 0.20%
Cost of debt 5.00% - 7.00% 6.00%
WACC 7.0% - 10.2% 8.6%
WACC

Carnival WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.98 1.36
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.40% 12.50%
Tax rate 0.20% 0.20%
Debt/Equity ratio 0.7 0.7
Cost of debt 5.00% 7.00%
After-tax WACC 7.0% 10.2%
Selected WACC 8.6%

Carnival'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 Carnival:

cost_of_equity (10.45%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.98) + 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.