CNO
CNO Financial Group Inc
Price:  
37.69 
USD
Volume:  
676,358.00
United States | Insurance
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CNO WACC - Weighted Average Cost of Capital

The WACC of CNO Financial Group Inc (CNO) is 6.2%.

The Cost of Equity of CNO Financial Group Inc (CNO) is 8.95%.
The Cost of Debt of CNO Financial Group Inc (CNO) is 5.00%.

Range Selected
Cost of equity 7.90% - 10.00% 8.95%
Tax rate 22.20% - 22.30% 22.25%
Cost of debt 5.00% - 5.00% 5.00%
WACC 5.7% - 6.7% 6.2%
WACC

CNO WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.87 0.92
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.90% 10.00%
Tax rate 22.20% 22.30%
Debt/Equity ratio 1.18 1.18
Cost of debt 5.00% 5.00%
After-tax WACC 5.7% 6.7%
Selected WACC 6.2%

CNO'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 CNO:

cost_of_equity (8.95%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.87) + 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.