SATS
EchoStar Corp
Price:  
29.91 
USD
Volume:  
2,750,727.00
United States | Communications Equipment
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SATS WACC - Weighted Average Cost of Capital

The WACC of EchoStar Corp (SATS) is 12.6%.

The Cost of Equity of EchoStar Corp (SATS) is 13.45%.
The Cost of Debt of EchoStar Corp (SATS) is 16.90%.

Range Selected
Cost of equity 10.90% - 16.00% 13.45%
Tax rate 26.20% - 27.00% 26.60%
Cost of debt 7.00% - 26.80% 16.90%
WACC 6.6% - 18.7% 12.6%
WACC

SATS WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.53 2
Additional risk adjustments 0.0% 0.5%
Cost of equity 10.90% 16.00%
Tax rate 26.20% 27.00%
Debt/Equity ratio 3 3
Cost of debt 7.00% 26.80%
After-tax WACC 6.6% 18.7%
Selected WACC 12.6%

SATS'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 SATS:

cost_of_equity (13.45%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.53) + 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.