FMCC
Federal Home Loan Mortgage Corp
Price:  
7.96 
USD
Volume:  
2,317,340.00
United States | Thrifts & Mortgage Finance
Valuation
Overview
Financials
Forecast
Compare
Historical Price
SolvencyDividends
Transactions
People

FMCC WACC - Weighted Average Cost of Capital

The WACC of Federal Home Loan Mortgage Corp (FMCC) is 7.9%.

The Cost of Equity of Federal Home Loan Mortgage Corp (FMCC) is 61.80%.
The Cost of Debt of Federal Home Loan Mortgage Corp (FMCC) is 9.80%.

Range Selected
Cost of equity 12.10% - 111.50% 61.80%
Tax rate 20.00% - 20.20% 20.10%
Cost of debt 4.00% - 15.60% 9.80%
WACC 3.2% - 12.6% 7.9%
WACC

FMCC WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.79 19.05
Additional risk adjustments 0.0% 0.5%
Cost of equity 12.10% 111.50%
Tax rate 20.00% 20.20%
Debt/Equity ratio 607.42 607.42
Cost of debt 4.00% 15.60%
After-tax WACC 3.2% 12.6%
Selected WACC 7.9%

FMCC'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 FMCC:

cost_of_equity (61.80%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.79) + 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.