The WACC of Mr. Cooper Group Inc (COOP) is 8.0%.
Range | Selected | |
Cost of equity | 6.4% - 10.3% | 8.35% |
Tax rate | 23.8% - 24.1% | 23.95% |
Cost of debt | 4.6% - 15.6% | 10.1% |
WACC | 4.8% - 11.2% | 8.0% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 4.6% | 5.6% |
Adjusted beta | 0.55 | 0.98 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 6.4% | 10.3% |
Tax rate | 23.8% | 24.1% |
Debt/Equity ratio | 1.3 | 1.3 |
Cost of debt | 4.6% | 15.6% |
After-tax WACC | 4.8% | 11.2% |
Selected WACC | 8.0% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
COOP | Mr. Cooper Group Inc | 1.3 | -0.09 | -0.05 |
EQB.TO | Equitable Group Inc | 4.09 | 0.77 | 0.19 |
ESNT | Essent Group Ltd | 0.08 | 0.55 | 0.52 |
FBC | Flagstar Bancorp Inc | 0.44 | 1.5 | 1.12 |
FN.TO | First National Financial Corp | 19.95 | 0.04 | 0 |
GHLD | Guild Holdings Co | 2.4 | -0.24 | -0.09 |
MTG | MGIC Investment Corp | 0.1 | 0.63 | 0.59 |
PFSI | PennyMac Financial Services Inc | 2.72 | 0.39 | 0.13 |
RDN | Radian Group Inc | 0.47 | 0.68 | 0.5 |
WD | Walker & Dunlop Inc | 0.61 | 0.7 | 0.48 |
Low | High | |
Unlevered beta | 0.16 | 0.49 |
Relevered beta | 0.33 | 0.97 |
Adjusted relevered beta | 0.55 | 0.98 |
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.