SGFY
Signify Health Inc
Price:  
30.49 
USD
Volume:  
9,626,810.00
United States | Health Care Providers & Services
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SGFY WACC - Weighted Average Cost of Capital

The WACC of Signify Health Inc (SGFY) is 7.1%.

The Cost of Equity of Signify Health Inc (SGFY) is 7.20%.
The Cost of Debt of Signify Health Inc (SGFY) is 6.65%.

Range Selected
Cost of equity 6.20% - 8.20% 7.20%
Tax rate 3.00% - 5.40% 4.20%
Cost of debt 6.30% - 7.00% 6.65%
WACC 6.2% - 8.1% 7.1%
WACC

SGFY WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.51 0.59
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.20% 8.20%
Tax rate 3.00% 5.40%
Debt/Equity ratio 0.05 0.05
Cost of debt 6.30% 7.00%
After-tax WACC 6.2% 8.1%
Selected WACC 7.1%

SGFY'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 SGFY:

cost_of_equity (7.20%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.51) + 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.