GOCO
Gohealth Inc
Price:  
5.51 
USD
Volume:  
41,882.00
United States | Insurance
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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 13.60%.
The Cost of Debt of Gohealth Inc (GOCO) is 16.90%.

Range Selected
Cost of equity 11.40% - 15.80% 13.60%
Tax rate 0.10% - 0.10% 0.10%
Cost of debt 9.90% - 23.90% 16.90%
WACC 10.1% - 22.9% 16.5%
WACC

Gohealth WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.63 1.96
Additional risk adjustments 0.0% 0.5%
Cost of equity 11.40% 15.80%
Tax rate 0.10% 0.10%
Debt/Equity ratio 7.32 7.32
Cost of debt 9.90% 23.90%
After-tax WACC 10.1% 22.9%
Selected WACC 16.5%

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.