The WACC of Sabre Corp (SABR) is 12.6%.
Range | Selected | |
Cost of equity | 16.3% - 21.8% | 19.05% |
Tax rate | 1.6% - 1.8% | 1.7% |
Cost of debt | 6.9% - 15.6% | 11.25% |
WACC | 8.5% - 16.6% | 12.6% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 4.6% | 5.6% |
Adjusted beta | 2.7 | 3.03 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 16.3% | 21.8% |
Tax rate | 1.6% | 1.8% |
Debt/Equity ratio | 4.32 | 4.32 |
Cost of debt | 6.9% | 15.6% |
After-tax WACC | 8.5% | 16.6% |
Selected WACC | 12.6% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
SABR | Sabre Corp | 4.32 | 2.46 | 0.47 |
CATM | Cardtronics PLC | 0.44 | 1.87 | 1.31 |
CSGS | CSG Systems International Inc | 0.3 | 0.61 | 0.47 |
EVOP | EVO Payments Inc | 0.39 | 1.11 | 0.8 |
FOUR | Shift4 Payments Inc | 0.3 | 1.88 | 1.45 |
IBEX | Ibex Ltd | 0 | 0.75 | 0.74 |
PRTH | Priority Technology Holdings Inc | 1.6 | 1.72 | 0.67 |
STNE | BRL | 0.62 | 1.09 | 0.67 |
SYKE | Sykes Enterprises Inc | 0.03 | 0.92 | 0.9 |
TTEC | TTEC Holdings Inc | 4.09 | -0.24 | -0.05 |
WNS | WNS (Holdings) Ltd | 0.12 | 0.67 | 0.6 |
Low | High | |
Unlevered beta | 0.67 | 0.74 |
Relevered beta | 3.54 | 4.03 |
Adjusted relevered beta | 2.7 | 3.03 |
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 Sabre:
cost_of_equity (19.05%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (2.7) + 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.