OMC
Omnicom Group Inc
Price:  
75.95 
USD
Volume:  
1,733,794.00
United States | Media
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Omnicom WACC - Weighted Average Cost of Capital

The WACC of Omnicom Group Inc (OMC) is 7.7%.

The Cost of Equity of Omnicom Group Inc (OMC) is 9.50%.
The Cost of Debt of Omnicom Group Inc (OMC) is 4.25%.

Range Selected
Cost of equity 8.10% - 10.90% 9.50%
Tax rate 26.30% - 26.70% 26.50%
Cost of debt 4.00% - 4.50% 4.25%
WACC 6.6% - 8.7% 7.7%
WACC

Omnicom WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.92 1.08
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.10% 10.90%
Tax rate 26.30% 26.70%
Debt/Equity ratio 0.41 0.41
Cost of debt 4.00% 4.50%
After-tax WACC 6.6% 8.7%
Selected WACC 7.7%

Omnicom'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 Omnicom:

cost_of_equity (9.50%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.92) + 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.