STMP
Stamps.Com Inc
Price:  
329.61 
USD
Volume:  
2,474,490
United States | Internet & Direct Marketing Retail

STMP WACC - Weighted Average Cost of Capital

The WACC of Stamps.Com Inc (STMP) is 8.3%.

The Cost of Equity of Stamps.Com Inc (STMP) is 8.25%.
The Cost of Debt of Stamps.Com Inc (STMP) is 4.25%.

RangeSelected
Cost of equity7.0% - 9.5%8.25%
Tax rate10.7% - 20.9%15.8%
Cost of debt4.0% - 4.5%4.25%
WACC7.0% - 9.5%8.3%
WACC

STMP WACC calculation

CategoryLowHigh
Long-term bond rate3.2%3.7%
Equity market risk premium4.2%5.2%
Adjusted beta0.911.02
Additional risk adjustments0.0%0.5%
Cost of equity7.0%9.5%
Tax rate10.7%20.9%
Debt/Equity ratio
00
Cost of debt4.0%4.5%
After-tax WACC7.0%9.5%
Selected WACC8.3%

STMP'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 STMP:

cost_of_equity (8.25%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (0.91) + 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.