FISV
Fiserv Inc
Price:  
114.23 
USD
Volume:  
31,736,900.00
United States | IT Services
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Fiserv WACC - Weighted Average Cost of Capital

The WACC of Fiserv Inc (FISV) is 8.1%.

The Cost of Equity of Fiserv Inc (FISV) is 9.30%.
The Cost of Debt of Fiserv Inc (FISV) is 5.00%.

Range Selected
Cost of equity 8.10% - 10.50% 9.30%
Tax rate 18.50% - 19.50% 19.00%
Cost of debt 5.00% - 5.00% 5.00%
WACC 7.2% - 9.0% 8.1%
WACC

Fiserv WACC calculation

Category Low High
Long-term bond rate 4.2% 4.7%
Equity market risk premium 4.2% 5.2%
Adjusted beta 0.92 1
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.10% 10.50%
Tax rate 18.50% 19.50%
Debt/Equity ratio 0.3 0.3
Cost of debt 5.00% 5.00%
After-tax WACC 7.2% 9.0%
Selected WACC 8.1%

Fiserv'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 Fiserv:

cost_of_equity (9.30%) = risk_free_rate (4.45%) + equity_risk_premium (4.70%) * adjusted_beta (0.92) + 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.