Invesco WACC - Weighted Average Cost of Capital
The WACC of Invesco Ltd (IVZ) is 7.1%.
| Range | Selected | |
| Cost of equity | 8.8% - 12.8% | 10.8% |
| Tax rate | 24.9% - 25.4% | 25.15% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 6.0% - 8.2% | 7.1% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.07 | 1.41 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.8% | 12.8% |
| Tax rate | 24.9% | 25.4% |
| Debt/Equity ratio | 0.95 | 0.95 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 6.0% | 8.2% |
| Selected WACC | 7.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| IVZ | Invesco Ltd | 0.95 | 1.26 | 0.74 |
| AMG | Affiliated Managers Group Inc | 0.46 | 0.95 | 0.71 |
| APO | Apollo Global Management Inc | 0.16 | 2.07 | 1.84 |
| ARCC | Ares Capital Corp | 0.88 | 0.68 | 0.41 |
| ARES | Ares Management Corp | 0.33 | 1.75 | 1.4 |
| BEN | Franklin Resources Inc | 0.93 | 0.91 | 0.54 |
| CG | Carlyle Group Inc | 0.45 | 1.69 | 1.27 |
| IGM.TO | IGM Financial Inc | 1.1 | 1.01 | 0.55 |
| JHG | Janus Henderson Group PLC | 0.06 | 1.31 | 1.25 |
| NTRS | Northern Trust Corp | 5.4 | 1.14 | 0.23 |
| Low | High | |
| Unlevered beta | 0.65 | 0.94 |
| Relevered beta | 1.1 | 1.61 |
| Adjusted relevered beta | 1.07 | 1.41 |
Invesco'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 Invesco:
cost_of_equity (10.80%) = 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.