GPN
Global Payments Inc
Price:  
78.85 
USD
Volume:  
2,735,158.00
United States | IT Services
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GPN WACC - Weighted Average Cost of Capital

The WACC of Global Payments Inc (GPN) is 7.4%.

The Cost of Equity of Global Payments Inc (GPN) is 10.30%.
The Cost of Debt of Global Payments Inc (GPN) is 4.80%.

Range Selected
Cost of equity 8.80% - 11.80% 10.30%
Tax rate 16.00% - 16.90% 16.45%
Cost of debt 4.00% - 5.60% 4.80%
WACC 6.3% - 8.5% 7.4%
WACC

GPN WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.07 1.24
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.80% 11.80%
Tax rate 16.00% 16.90%
Debt/Equity ratio 0.87 0.87
Cost of debt 4.00% 5.60%
After-tax WACC 6.3% 8.5%
Selected WACC 7.4%

GPN'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 GPN:

cost_of_equity (10.30%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.07) + 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.