MOMO
Momo Inc
Price:  
5.89 
USD
Volume:  
454,443.00
China | Interactive Media & Services
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MOMO WACC - Weighted Average Cost of Capital

The WACC of Momo Inc (MOMO) is 7.3%.

The Cost of Equity of Momo Inc (MOMO) is 9.60%.
The Cost of Debt of Momo Inc (MOMO) is 5.00%.

Range Selected
Cost of equity 7.40% - 11.80% 9.60%
Tax rate 27.00% - 32.30% 29.65%
Cost of debt 5.00% - 5.00% 5.00%
WACC 6.0% - 8.6% 7.3%
WACC

MOMO WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.77 1.24
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.40% 11.80%
Tax rate 27.00% 32.30%
Debt/Equity ratio 0.63 0.63
Cost of debt 5.00% 5.00%
After-tax WACC 6.0% 8.6%
Selected WACC 7.3%

MOMO'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 MOMO:

cost_of_equity (9.60%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.77) + 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.