COIN WACC - Weighted Average Cost of Capital
The WACC of Coinbase Global Inc (COIN) is 8.1%.
| Range | Selected | |
| Cost of equity | 7.4% - 9.5% | 8.45% |
| Tax rate | 17.6% - 20.3% | 18.95% |
| Cost of debt | 4.5% - 4.5% | 4.5% |
| WACC | 7.1% - 9.1% | 8.1% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.76 | 0.83 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.4% | 9.5% |
| Tax rate | 17.6% | 20.3% |
| Debt/Equity ratio | 0.07 | 0.07 |
| Cost of debt | 4.5% | 4.5% |
| After-tax WACC | 7.1% | 9.1% |
| Selected WACC | 8.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| COIN | Coinbase Global Inc | 0.07 | 2.89 | 2.74 |
| CME | CME Group Inc | 0.03 | 0.08 | 0.08 |
| FDS | Factset Research Systems Inc | 0.08 | 0.59 | 0.56 |
| ICE | Intercontinental Exchange Inc | 0.2 | 0.58 | 0.5 |
| MCO | Moody's Corp | 0.09 | 1.12 | 1.04 |
| MSCI | MSCI Inc | 0.1 | 0.78 | 0.72 |
| NDAQ | Nasdaq Inc | 0.2 | 0.8 | 0.69 |
| SPGI | S&P Global Inc | 0.07 | 0.85 | 0.81 |
| Low | High | |
| Unlevered beta | 0.67 | 0.74 |
| Relevered beta | 0.64 | 0.75 |
| Adjusted relevered beta | 0.76 | 0.83 |
COIN'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 COIN:
cost_of_equity (8.45%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.76) + 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.