COMM
CommScope Holding Company Inc
Price:  
7.85 
USD
Volume:  
2,881,243.00
United States | Communications Equipment
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COMM WACC - Weighted Average Cost of Capital

The WACC of CommScope Holding Company Inc (COMM) is 12.4%.

The Cost of Equity of CommScope Holding Company Inc (COMM) is 27.45%.
The Cost of Debt of CommScope Holding Company Inc (COMM) is 10.95%.

Range Selected
Cost of equity 20.20% - 34.70% 27.45%
Tax rate 11.30% - 12.50% 11.90%
Cost of debt 6.30% - 15.60% 10.95%
WACC 7.9% - 17.0% 12.4%
WACC

COMM WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 3.55 5.32
Additional risk adjustments 0.0% 0.5%
Cost of equity 20.20% 34.70%
Tax rate 11.30% 12.50%
Debt/Equity ratio 5.43 5.43
Cost of debt 6.30% 15.60%
After-tax WACC 7.9% 17.0%
Selected WACC 12.4%

COMM'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 COMM:

cost_of_equity (27.45%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (3.55) + 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.