UWMC WACC - Weighted Average Cost of Capital

The WACC of UWM Holdings Corp (UWMC) is 7.8%.

The Cost of Equity of UWM Holdings Corp (UWMC) is 11.10%.

The Cost of Debt of UWM Holdings Corp (UWMC) is 5.50%.

	Range	Selected
Cost of equity	9.60% - 12.60%	11.10%
Tax rate	0.50% - 1.20%	0.85%
Cost of debt	4.00% - 7.00%	5.50%
WACC	6.3% - 9.3%	7.8%

WACC

UWMC WACC calculation

Category	Low	High

Long-term bond rate	3.9%	4.4%
Equity market risk premium	4.6%	5.6%
Adjusted beta	1.24	1.38

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.60%	12.60%

Tax rate	0.50%	1.20%
Debt/Equity ratio	1.36	1.36
Cost of debt	4.00%	7.00%

After-tax WACC	6.3%	9.3%


Selected WACC	7.8%

UWMC'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 UWMC:

cost_of_equity (11.10%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.24) + 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.