W
Wayfair Inc
Price:  
50.11 
USD
Volume:  
3,245,445.00
United States | Internet & Direct Marketing Retail
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Wayfair WACC - Weighted Average Cost of Capital

The WACC of Wayfair Inc (W) is 8.2%.

The Cost of Equity of Wayfair Inc (W) is 9.60%.
The Cost of Debt of Wayfair Inc (W) is 5.50%.

Range Selected
Cost of equity 7.70% - 11.50% 9.60%
Tax rate 1.10% - 1.60% 1.35%
Cost of debt 4.00% - 7.00% 5.50%
WACC 6.5% - 10.0% 8.2%
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 0.84 1.18
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.70% 11.50%
Tax rate 1.10% 1.60%
Debt/Equity ratio 0.49 0.49
Cost of debt 4.00% 7.00%
After-tax WACC 6.5% 10.0%
Selected WACC 8.2%

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 (9.60%) = 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.