SABR
Sabre Corp
Price:  
3.02 
USD
Volume:  
3,161,073
United States | IT Services

Sabre WACC - Weighted Average Cost of Capital

The WACC of Sabre Corp (SABR) is 12.6%.

The Cost of Equity of Sabre Corp (SABR) is 19.05%.
The Cost of Debt of Sabre Corp (SABR) is 11.25%.

RangeSelected
Cost of equity16.3% - 21.8%19.05%
Tax rate1.6% - 1.8%1.7%
Cost of debt6.9% - 15.6%11.25%
WACC8.5% - 16.6%12.6%
WACC

Sabre WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta2.73.03
Additional risk adjustments0.0%0.5%
Cost of equity16.3%21.8%
Tax rate1.6%1.8%
Debt/Equity ratio
4.324.32
Cost of debt6.9%15.6%
After-tax WACC8.5%16.6%
Selected WACC12.6%

Sabre'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 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.