CHTR
Charter Communications Inc
Price:  
382.08 
USD
Volume:  
1,139,740.00
United States | Media
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CHTR WACC - Weighted Average Cost of Capital

The WACC of Charter Communications Inc (CHTR) is 6.6%.

The Cost of Equity of Charter Communications Inc (CHTR) is 10.55%.
The Cost of Debt of Charter Communications Inc (CHTR) is 5.60%.

Range Selected
Cost of equity 8.80% - 12.30% 10.55%
Tax rate 19.70% - 21.80% 20.75%
Cost of debt 5.10% - 6.10% 5.60%
WACC 5.8% - 7.5% 6.6%
WACC

CHTR WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.07 1.33
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.80% 12.30%
Tax rate 19.70% 21.80%
Debt/Equity ratio 1.77 1.77
Cost of debt 5.10% 6.10%
After-tax WACC 5.8% 7.5%
Selected WACC 6.6%

CHTR'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 CHTR:

cost_of_equity (10.55%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.07) + 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.