CSGP
CoStar Group Inc
Price:  
96.83 
USD
Volume:  
2,247,703.00
United States | Professional Services
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CSGP WACC - Weighted Average Cost of Capital

The WACC of CoStar Group Inc (CSGP) is 8.1%.

The Cost of Equity of CoStar Group Inc (CSGP) is 8.10%.
The Cost of Debt of CoStar Group Inc (CSGP) is 13.95%.

Range Selected
Cost of equity 6.70% - 9.50% 8.10%
Tax rate 24.80% - 26.20% 25.50%
Cost of debt 4.00% - 23.90% 13.95%
WACC 6.6% - 9.7% 8.1%
WACC

CSGP WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.61 0.82
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.70% 9.50%
Tax rate 24.80% 26.20%
Debt/Equity ratio 0.03 0.03
Cost of debt 4.00% 23.90%
After-tax WACC 6.6% 9.7%
Selected WACC 8.1%

CSGP'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 CSGP:

cost_of_equity (8.10%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.61) + 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.