SEIC WACC - Weighted Average Cost of Capital

The WACC of SEI Investments Co (SEIC) is 6.8%.

The Cost of Equity of SEI Investments Co (SEIC) is 10.05%.

The Cost of Debt of SEI Investments Co (SEIC) is 4.50%.

	Range	Selected
Cost of equity	8.30% - 11.80%	10.05%
Tax rate	21.70% - 22.00%	21.85%
Cost of debt	4.50% - 4.50%	4.50%
WACC	5.9% - 7.6%	6.8%

WACC

SEIC WACC calculation

Category	Low	High

Long-term bond rate	3.9%	4.4%
Equity market risk premium	4.6%	5.6%
Adjusted beta	0.96	1.23

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.30%	11.80%

Tax rate	21.70%	22.00%
Debt/Equity ratio	1	1
Cost of debt	4.50%	4.50%

After-tax WACC	5.9%	7.6%


Selected WACC	6.8%

SEIC'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 SEIC:

cost_of_equity (10.05%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.96) + 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.