COWN
Cowen Inc
Price:  
38.99 
USD
Volume:  
1,362,220.00
United States | Capital Markets
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COWN WACC - Weighted Average Cost of Capital

The WACC of Cowen Inc (COWN) is 10.5%.

The Cost of Equity of Cowen Inc (COWN) is 9.10%.
The Cost of Debt of Cowen Inc (COWN) is 14.75%.

Range Selected
Cost of equity 6.50% - 11.70% 9.10%
Tax rate 23.50% - 27.20% 25.35%
Cost of debt 8.60% - 20.90% 14.75%
WACC 6.6% - 14.4% 10.5%
WACC

COWN WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.58 1.22
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.50% 11.70%
Tax rate 23.50% 27.20%
Debt/Equity ratio 3.18 3.18
Cost of debt 8.60% 20.90%
After-tax WACC 6.6% 14.4%
Selected WACC 10.5%

COWN'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 COWN:

cost_of_equity (9.10%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.58) + 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.