INFO WACC - Weighted Average Cost of Capital
The WACC of IHS Markit Ltd (INFO) is 8.0%.
| Range | Selected | |
| Cost of equity | 7.3% - 9.5% | 8.4% |
| Tax rate | 8.5% - 11.4% | 9.95% |
| Cost of debt | 4.4% - 4.5% | 4.45% |
| WACC | 7.0% - 8.9% | 8.0% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 4.2% | 5.2% |
| Adjusted beta | 0.98 | 1.01 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.3% | 9.5% |
| Tax rate | 8.5% | 11.4% |
| Debt/Equity ratio | 0.11 | 0.11 |
| Cost of debt | 4.4% | 4.5% |
| After-tax WACC | 7.0% | 8.9% |
| Selected WACC | 8.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| INFO | IHS Markit Ltd | 0.11 | 1.05 | 0.96 |
| CLGX | Corelogic Inc | 0.32 | 1.14 | 0.89 |
| CLVT | CLARIVATE PLC | 1.53 | 0.71 | 0.3 |
| CSGP | CoStar Group Inc | 0.03 | 0.75 | 0.74 |
| EFX | Equifax Inc | 0.16 | 1.21 | 1.06 |
| FORR | Forrester Research Inc | 0.19 | 0.81 | 0.69 |
| NLSN | Nielsen Holdings PLC | 0.56 | 1.18 | 0.79 |
| TRI.TO | Thomson Reuters Corp | 0.03 | 0.62 | 0.6 |
| TRU | TransUnion | 0.3 | 1.61 | 1.27 |
| UPWK | Upwork Inc | 0.2 | 1.3 | 1.1 |
| Low | High | |
| Unlevered beta | 0.77 | 0.92 |
| Relevered beta | 0.97 | 1.01 |
| Adjusted relevered beta | 0.98 | 1.01 |
INFO'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 INFO:
cost_of_equity (8.40%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (0.98) + 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.