SIRI
Sirius XM Holdings Inc
Price:  
21.47 
USD
Volume:  
4,802,038.00
United States | Media
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SIRI WACC - Weighted Average Cost of Capital

The WACC of Sirius XM Holdings Inc (SIRI) is 5.2%.

The Cost of Equity of Sirius XM Holdings Inc (SIRI) is 6.85%.
The Cost of Debt of Sirius XM Holdings Inc (SIRI) is 5.00%.

Range Selected
Cost of equity 6.00% - 7.70% 6.85%
Tax rate 15.80% - 20.00% 17.90%
Cost of debt 4.70% - 5.30% 5.00%
WACC 4.8% - 5.7% 5.2%
WACC

SIRI WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.45 0.51
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.00% 7.70%
Tax rate 15.80% 20.00%
Debt/Equity ratio 1.5 1.5
Cost of debt 4.70% 5.30%
After-tax WACC 4.8% 5.7%
Selected WACC 5.2%

SIRI'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 SIRI:

cost_of_equity (6.85%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.45) + 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.