EQ.V WACC - Weighted Average Cost of Capital

The WACC of EQ Inc (EQ.V) is 6.3%.

The Cost of Equity of EQ Inc (EQ.V) is 6.30%.

The Cost of Debt of EQ Inc (EQ.V) is 10.35%.

	Range	Selected
Cost of equity	5.50% - 7.10%	6.30%
Tax rate	26.20% - 27.00%	26.60%
Cost of debt	7.00% - 13.70%	10.35%
WACC	5.5% - 7.1%	6.3%

WACC

EQ.V WACC calculation

Category	Low	High

Long-term bond rate	3.9%	4.4%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.33	0.36

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.50%	7.10%

Tax rate	26.20%	27.00%
Debt/Equity ratio	0.02	0.02
Cost of debt	7.00%	13.70%

After-tax WACC	5.5%	7.1%


Selected WACC	6.3%

EQ.V'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 EQ.V:

cost_of_equity (6.30%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (0.33) + 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.