VOYA WACC - Weighted Average Cost of Capital
The WACC of Voya Financial Inc (VOYA) is 7.8%.
| Range | Selected | |
| Cost of equity | 7.7% - 10.2% | 8.95% |
| Tax rate | 4.5% - 5.9% | 5.2% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.9% - 8.7% | 7.8% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.84 | 0.95 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.7% | 10.2% |
| Tax rate | 4.5% | 5.9% |
| Debt/Equity ratio | 0.37 | 0.37 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.9% | 8.7% |
| Selected WACC | 7.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| VOYA | Voya Financial Inc | 0.37 | 1.08 | 0.8 |
| ALRS | Alerus Financial Corp | 0.18 | 1.12 | 0.96 |
| CODI | Compass Diversified Holdings | 3.86 | 1.27 | 0.27 |
| EFN.TO | Element Fleet Management Corp | 0.63 | 0.89 | 0.56 |
| EQH | Equitable Holdings Inc | 1.1 | 1.16 | 0.57 |
| JEF | Jefferies Financial Group Inc | 2.72 | 1.61 | 0.45 |
| SFI.V | Solution Financial Inc | 0.34 | 0.94 | 0.71 |
| UCPC | Unicapital Corp | 3.42 | 0 | 0 |
| BMED.MI | Banca Mediolanum SpA | 0.66 | 1.09 | 0.67 |
| KBCA.BR | KBC Ancora BV | 0.1 | 0.8 | 0.73 |
| Low | High | |
| Unlevered beta | 0.56 | 0.68 |
| Relevered beta | 0.76 | 0.93 |
| Adjusted relevered beta | 0.84 | 0.95 |
VOYA'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 VOYA:
cost_of_equity (8.95%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.84) + 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.