KW
Kennedy-Wilson Holdings Inc
Price:  
6.67 
USD
Volume:  
1,791,357.00
United States | Real Estate Management & Development
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KW WACC - Weighted Average Cost of Capital

The WACC of Kennedy-Wilson Holdings Inc (KW) is 8.0%.

The Cost of Equity of Kennedy-Wilson Holdings Inc (KW) is 12.85%.
The Cost of Debt of Kennedy-Wilson Holdings Inc (KW) is 9.90%.

Range Selected
Cost of equity 10.50% - 15.20% 12.85%
Tax rate 26.90% - 27.90% 27.40%
Cost of debt 4.20% - 15.60% 9.90%
WACC 4.2% - 11.9% 8.0%
WACC

KW WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.44 1.84
Additional risk adjustments 0.0% 0.5%
Cost of equity 10.50% 15.20%
Tax rate 26.90% 27.90%
Debt/Equity ratio 5.62 5.62
Cost of debt 4.20% 15.60%
After-tax WACC 4.2% 11.9%
Selected WACC 8.0%

KW'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 KW:

cost_of_equity (12.85%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.44) + 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.