WU WACC - Weighted Average Cost of Capital

The WACC of Western Union Co (WU) is 8.4%.

The Cost of Equity of Western Union Co (WU) is 12.95%.

The Cost of Debt of Western Union Co (WU) is 4.55%.

	Range	Selected
Cost of equity	11.10% - 14.80%	12.95%
Tax rate	13.50% - 14.70%	14.10%
Cost of debt	4.00% - 5.10%	4.55%
WACC	7.3% - 9.5%	8.4%

WACC

WU WACC calculation

Category	Low	High

Long-term bond rate	3.9%	4.4%
Equity market risk premium	4.6%	5.6%
Adjusted beta	1.57	1.78

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.10%	14.80%

Tax rate	13.50%	14.70%
Debt/Equity ratio	1.02	1.02
Cost of debt	4.00%	5.10%

After-tax WACC	7.3%	9.5%


Selected WACC	8.4%

WU'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 WU:

cost_of_equity (12.95%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.57) + 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.