Factset WACC - Weighted Average Cost of Capital
The WACC of Factset Research Systems Inc (FDS) is 8.3%.
| Range | Selected | |
| Cost of equity | 7.5% - 9.8% | 8.65% |
| Tax rate | 13.8% - 15.8% | 14.8% |
| Cost of debt | 4.0% - 4.6% | 4.3% |
| WACC | 7.2% - 9.3% | 8.3% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.79 | 0.88 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.5% | 9.8% |
| Tax rate | 13.8% | 15.8% |
| Debt/Equity ratio | 0.08 | 0.08 |
| Cost of debt | 4.0% | 4.6% |
| After-tax WACC | 7.2% | 9.3% |
| Selected WACC | 8.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| FDS | Factset Research Systems Inc | 0.08 | 0.59 | 0.55 |
| CBOE | Cboe Global Markets Inc | 0.06 | -0.39 | -0.37 |
| CIIX | ChineseInvestors.com Inc | 1119.23 | 1.05 | 0 |
| FNQ.CN | Fineqia International Inc | 0.25 | 0.84 | 0.69 |
| MORN | Morningstar Inc | 0.06 | 0.9 | 0.86 |
| MSCI | MSCI Inc | 0.1 | 0.81 | 0.74 |
| SPGI | S&P Global Inc | 0.07 | 0.86 | 0.81 |
| X.TO | TMX Group Ltd | 0.14 | 0.55 | 0.49 |
| IHP.L | IntegraFin Holdings plc | 0 | 1.56 | 1.56 |
| INFRO.OL | Infront ASA | 0.71 | 1.6 | 1 |
| Low | High | |
| Unlevered beta | 0.64 | 0.77 |
| Relevered beta | 0.69 | 0.82 |
| Adjusted relevered beta | 0.79 | 0.88 |
Factset'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 Factset:
cost_of_equity (8.65%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.79) + 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.