ESINQ WACC - Weighted Average Cost of Capital

The WACC of ITT Educational Services Inc (ESINQ) is 4.8%.

The Cost of Equity of ITT Educational Services Inc (ESINQ) is 158,004.80%.

The Cost of Debt of ITT Educational Services Inc (ESINQ) is 5.25%.

	Range	Selected
Cost of equity	124,129.40% - 191,880.20%	158,004.80%
Tax rate	39.30% - 40.00%	39.65%
Cost of debt	4.90% - 5.60%	5.25%
WACC	4.2% - 5.3%	4.8%

WACC

ESINQ WACC calculation

Category	Low	High

Long-term bond rate	3.9%	4.4%
Equity market risk premium	4.6%	5.6%
Adjusted beta	26983.81	34263.46

Additional risk adjustments	0.0%	0.5%
Cost of equity	124,129.40%	191,880.20%

Tax rate	39.30%	40.00%
Debt/Equity ratio	97659.86	97659.86
Cost of debt	4.90%	5.60%

After-tax WACC	4.2%	5.3%


Selected WACC	4.8%

ESINQ'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 ESINQ:

cost_of_equity (158,004.80%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (26983.81) + 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.