CDAY
Ceridian HCM Holding Inc
Price:  
69.52 
USD
Volume:  
2,683,840.00
United States | Software
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CDAY WACC - Weighted Average Cost of Capital

The WACC of Ceridian HCM Holding Inc (CDAY) is 10.8%.

The Cost of Equity of Ceridian HCM Holding Inc (CDAY) is 11.65%.
The Cost of Debt of Ceridian HCM Holding Inc (CDAY) is 5.20%.

Range Selected
Cost of equity 10.20% - 13.10% 11.65%
Tax rate 26.20% - 27.00% 26.60%
Cost of debt 4.00% - 6.40% 5.20%
WACC 9.4% - 12.2% 10.8%
WACC

CDAY WACC calculation

Category Low High
Long-term bond rate 4.2% 4.7%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.31 1.41
Additional risk adjustments 0.0% 0.5%
Cost of equity 10.20% 13.10%
Tax rate 26.20% 27.00%
Debt/Equity ratio 0.11 0.11
Cost of debt 4.00% 6.40%
After-tax WACC 9.4% 12.2%
Selected WACC 10.8%

CDAY'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 CDAY:

cost_of_equity (11.65%) = risk_free_rate (4.45%) + equity_risk_premium (5.10%) * adjusted_beta (1.31) + 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.