EQH WACC - Weighted Average Cost of Capital
The WACC of Equitable Holdings Inc (EQH) is 6.7%.
| Range | Selected | |
| Cost of equity | 9.5% - 12.0% | 10.75% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 4.0% - 4.8% | 4.4% |
| WACC | 6.0% - 7.4% | 6.7% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.22 | 1.27 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.5% | 12.0% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 1.17 | 1.17 |
| Cost of debt | 4.0% | 4.8% |
| After-tax WACC | 6.0% | 7.4% |
| Selected WACC | 6.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| EQH | Equitable Holdings Inc | 1.17 | 1.17 | 0.63 |
| ALRS | Alerus Financial Corp | 0.18 | 1.16 | 1.02 |
| JEF | Jefferies Financial Group Inc | 2.69 | 1.61 | 0.54 |
| ONEX.TO | Onex Corp | 0.91 | 1.12 | 0.67 |
| SFI.V | Solution Financial Inc | 0.34 | 0.94 | 0.75 |
| SUND | Sundance Strategies Inc | 0.14 | 0.74 | 0.67 |
| VOYA | Voya Financial Inc | 0.36 | 1.12 | 0.89 |
| BMED.MI | Banca Mediolanum SpA | 0.65 | 1.1 | 0.75 |
| KBCA.BR | KBC Ancora BV | 0.1 | 0.81 | 0.75 |
| MNG.L | M&G PLC | 1.13 | 1.43 | 0.78 |
| Low | High | |
| Unlevered beta | 0.72 | 0.75 |
| Relevered beta | 1.33 | 1.4 |
| Adjusted relevered beta | 1.22 | 1.27 |
EQH'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 EQH:
cost_of_equity (10.75%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.22) + 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.