SLQT
SelectQuote Inc
Price:  
2.52 
USD
Volume:  
1,152,592.00
United States | Insurance
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SLQT WACC - Weighted Average Cost of Capital

The WACC of SelectQuote Inc (SLQT) is 9.5%.

The Cost of Equity of SelectQuote Inc (SLQT) is 9.35%.
The Cost of Debt of SelectQuote Inc (SLQT) is 12.10%.

Range Selected
Cost of equity 7.90% - 10.80% 9.35%
Tax rate 19.60% - 22.00% 20.80%
Cost of debt 8.60% - 15.60% 12.10%
WACC 7.3% - 11.6% 9.5%
WACC

SLQT WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.88 1.05
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.90% 10.80%
Tax rate 19.60% 22.00%
Debt/Equity ratio 1.49 1.49
Cost of debt 8.60% 15.60%
After-tax WACC 7.3% 11.6%
Selected WACC 9.5%

SLQT'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 SLQT:

cost_of_equity (9.35%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.88) + 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.