CMLS
Cumulus Media Inc
Price:  
0.19 
USD
Volume:  
2,553,610.00
United States | Media
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CMLS WACC - Weighted Average Cost of Capital

The WACC of Cumulus Media Inc (CMLS) is 13.1%.

The Cost of Equity of Cumulus Media Inc (CMLS) is 10.35%.
The Cost of Debt of Cumulus Media Inc (CMLS) is 15.80%.

Range Selected
Cost of equity 8.20% - 12.50% 10.35%
Tax rate 16.10% - 17.20% 16.65%
Cost of debt 7.70% - 23.90% 15.80%
WACC 6.5% - 19.6% 13.1%
WACC

CMLS WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.93 1.37
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.20% 12.50%
Tax rate 16.10% 17.20%
Debt/Equity ratio 53.67 53.67
Cost of debt 7.70% 23.90%
After-tax WACC 6.5% 19.6%
Selected WACC 13.1%

CMLS'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 CMLS:

cost_of_equity (10.35%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.93) + 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.