Coursera WACC - Weighted Average Cost of Capital
The WACC of Coursera Inc (COUR) is 7.1%.
| Range | Selected | |
| Cost of equity | 7.6% - 10.9% | 9.25% |
| Tax rate | 2.0% - 2.5% | 2.25% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.2% - 7.9% | 7.1% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.81 | 1.08 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.6% | 10.9% |
| Tax rate | 2.0% | 2.5% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.2% | 7.9% |
| Selected WACC | 7.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| COUR | Coursera Inc | 0.9 | 1.33 | 0.71 |
| ATGE | Adtalem Global Education Inc | 0.14 | 0.69 | 0.61 |
| BFAM | Bright Horizons Family Solutions Inc | 0.13 | 0.39 | 0.35 |
| CHGG | Chegg Inc | 4.71 | 2.01 | 0.36 |
| CNGO | Cengage Learning Holdings II Inc | 1.1 | -0.01 | 0 |
| GHC | Graham Holdings Co | 0.23 | 0.68 | 0.55 |
| HMHC | Houghton Mifflin Harcourt Co | 0.12 | 1.14 | 1.02 |
| LAUR | Laureate Education Inc | 0.03 | 0.77 | 0.75 |
| LRN | Stride Inc | 0.07 | 0.38 | 0.36 |
| Low | High | |
| Unlevered beta | 0.4 | 0.6 |
| Relevered beta | 0.72 | 1.12 |
| Adjusted relevered beta | 0.81 | 1.08 |
Coursera'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 Coursera:
cost_of_equity (9.25%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.81) + 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.