GOCO
Gohealth Inc
Price:  
5.77 
USD
Volume:  
33,215
United States | Insurance

Gohealth WACC - Weighted Average Cost of Capital

The WACC of Gohealth Inc (GOCO) is 16.5%.

The Cost of Equity of Gohealth Inc (GOCO) is 13.6%.
The Cost of Debt of Gohealth Inc (GOCO) is 16.9%.

RangeSelected
Cost of equity11.4% - 15.8%13.6%
Tax rate0.1% - 0.1%0.1%
Cost of debt9.9% - 23.9%16.9%
WACC10.1% - 22.9%16.5%
WACC

Gohealth WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta1.631.96
Additional risk adjustments0.0%0.5%
Cost of equity11.4%15.8%
Tax rate0.1%0.1%
Debt/Equity ratio
7.327.32
Cost of debt9.9%23.9%
After-tax WACC10.1%22.9%
Selected WACC16.5%

Gohealth'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 Gohealth:

cost_of_equity (13.60%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.63) + 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.