OPEN
Opendoor Technologies Inc
Price:  
0.65 
USD
Volume:  
68,875,060.00
United States | Real Estate Management & Development
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OPEN WACC - Weighted Average Cost of Capital

The WACC of Opendoor Technologies Inc (OPEN) is 10.2%.

The Cost of Equity of Opendoor Technologies Inc (OPEN) is 18.50%.
The Cost of Debt of Opendoor Technologies Inc (OPEN) is 8.35%.

Range Selected
Cost of equity 15.40% - 21.60% 18.50%
Tax rate 0.10% - 0.20% 0.15%
Cost of debt 7.00% - 9.70% 8.35%
WACC 8.5% - 11.8% 10.2%
WACC

OPEN WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 2.51 2.98
Additional risk adjustments 0.0% 0.5%
Cost of equity 15.40% 21.60%
Tax rate 0.10% 0.20%
Debt/Equity ratio 4.64 4.64
Cost of debt 7.00% 9.70%
After-tax WACC 8.5% 11.8%
Selected WACC 10.2%

OPEN'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 OPEN:

cost_of_equity (18.50%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (2.51) + 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.