PDI
PIMCO Dynamic Income Fund
Price:  
18.86 
USD
Volume:  
1,566,490.00
United States | N/A
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PDI WACC - Weighted Average Cost of Capital

The WACC of PIMCO Dynamic Income Fund (PDI) is 7.9%.

The Cost of Equity of PIMCO Dynamic Income Fund (PDI) is 9.75%.
The Cost of Debt of PIMCO Dynamic Income Fund (PDI) is 5.50%.

Range Selected
Cost of equity 8.60% - 10.90% 9.75%
Tax rate 26.20% - 27.00% 26.60%
Cost of debt 4.00% - 7.00% 5.50%
WACC 6.8% - 9.1% 7.9%
WACC

PDI WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.03 1.09
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.60% 10.90%
Tax rate 26.20% 27.00%
Debt/Equity ratio 0.48 0.48
Cost of debt 4.00% 7.00%
After-tax WACC 6.8% 9.1%
Selected WACC 7.9%

PDI'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 PDI:

cost_of_equity (9.75%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.03) + 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.