VZIO WACC - Weighted Average Cost of Capital
The WACC of Vizio Holding Corp (VZIO) is 8.3%.
| Range | Selected | |
| Cost of equity | 9.9% - 13.5% | 11.7% |
| Tax rate | 25.6% - 35.5% | 30.55% |
| Cost of debt | 7.0% - 7.0% | 7% |
| WACC | 7.5% - 9.0% | 8.3% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.31 | 1.55 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.9% | 13.5% |
| Tax rate | 25.6% | 35.5% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 7.0% | 7.0% |
| After-tax WACC | 7.5% | 9.0% |
| Selected WACC | 8.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| VZIO | Vizio Holding Corp | 1.08 | 0.03 | 0.02 |
| GPRO | GoPro Inc | 0.79 | 2.03 | 1.29 |
| UEIC | Universal Electronics Inc | 0.44 | 1.31 | 0.99 |
| VOXX | VOXX International Corp | 0.46 | 0.34 | 0.25 |
| Low | High | |
| Unlevered beta | 0.4 | 0.84 |
| Relevered beta | 1.46 | 1.82 |
| Adjusted relevered beta | 1.31 | 1.55 |
VZIO'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 VZIO:
cost_of_equity (11.70%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.31) + 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.