IHRT
iHeartMedia Inc
Price:  
1.09 
USD
Volume:  
434,017.00
United States | Media
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IHRT WACC - Weighted Average Cost of Capital

The WACC of iHeartMedia Inc (IHRT) is 14.1%.

The Cost of Equity of iHeartMedia Inc (IHRT) is 8.00%.
The Cost of Debt of iHeartMedia Inc (IHRT) is 15.30%.

Range Selected
Cost of equity 6.40% - 9.60% 8.00%
Tax rate 5.50% - 6.90% 6.20%
Cost of debt 6.70% - 23.90% 15.30%
WACC 6.3% - 21.9% 14.1%
WACC

IHRT WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.56 0.85
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.40% 9.60%
Tax rate 5.50% 6.90%
Debt/Equity ratio 32.42 32.42
Cost of debt 6.70% 23.90%
After-tax WACC 6.3% 21.9%
Selected WACC 14.1%

IHRT'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 IHRT:

cost_of_equity (8.00%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.56) + 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.