W
Wayfair Inc
Price:  
77.84 
USD
Volume:  
6,836,851.00
United States | Internet & Direct Marketing Retail
Valuation
Overview
Financials
Forecast
Compare
Historical Price
SolvencyDividends
Transactions
People

Wayfair WACC - Weighted Average Cost of Capital

The WACC of Wayfair Inc (W) is 8.9%.

The Cost of Equity of Wayfair Inc (W) is 9.95%.
The Cost of Debt of Wayfair Inc (W) is 5.50%.

Range Selected
Cost of equity 7.40% - 12.50% 9.95%
Tax rate 1.10% - 1.60% 1.35%
Cost of debt 4.00% - 7.00% 5.50%
WACC 6.6% - 11.2% 8.9%
WACC

Wayfair WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.77 1.36
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.40% 12.50%
Tax rate 1.10% 1.60%
Debt/Equity ratio 0.31 0.31
Cost of debt 4.00% 7.00%
After-tax WACC 6.6% 11.2%
Selected WACC 8.9%

Wayfair'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 Wayfair:

cost_of_equity (9.95%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.77) + 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.