COOP
Mr. Cooper Group Inc
Price:  
151.31 
USD
Volume:  
824,620
United States | Thrifts & Mortgage Finance

COOP WACC - Weighted Average Cost of Capital

The WACC of Mr. Cooper Group Inc (COOP) is 8.0%.

The Cost of Equity of Mr. Cooper Group Inc (COOP) is 8.35%.
The Cost of Debt of Mr. Cooper Group Inc (COOP) is 10.1%.

RangeSelected
Cost of equity6.4% - 10.3%8.35%
Tax rate23.8% - 24.1%23.95%
Cost of debt4.6% - 15.6%10.1%
WACC4.8% - 11.2%8.0%
WACC

COOP WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta0.550.98
Additional risk adjustments0.0%0.5%
Cost of equity6.4%10.3%
Tax rate23.8%24.1%
Debt/Equity ratio
1.31.3
Cost of debt4.6%15.6%
After-tax WACC4.8%11.2%
Selected WACC8.0%

COOP'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 COOP:

cost_of_equity (8.35%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.55) + 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.