CME
CME Group Inc
Price:  
271.28 
USD
Volume:  
1,684,197.00
United States | Capital Markets
Valuation
Overview
Financials
Forecast
Compare
Historical Price
SolvencyDividends
Transactions
People

CME WACC - Weighted Average Cost of Capital

The WACC of CME Group Inc (CME) is 6.7%.

The Cost of Equity of CME Group Inc (CME) is 6.80%.
The Cost of Debt of CME Group Inc (CME) is 4.25%.

Range Selected
Cost of equity 5.80% - 7.80% 6.80%
Tax rate 22.30% - 22.50% 22.40%
Cost of debt 4.00% - 4.50% 4.25%
WACC 5.7% - 7.6% 6.7%
WACC

CME WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.42 0.52
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.80% 7.80%
Tax rate 22.30% 22.50%
Debt/Equity ratio 0.04 0.04
Cost of debt 4.00% 4.50%
After-tax WACC 5.7% 7.6%
Selected WACC 6.7%

CME'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 CME:

cost_of_equity (6.80%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.42) + 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.