The WACC of WW International Inc (WW) is 11.8%.
| Range | Selected | |
| Cost of equity | 11.50% - 18.80% | 15.15% |
| Tax rate | 9.00% - 19.70% | 14.35% |
| Cost of debt | 5.90% - 20.90% | 13.40% |
| WACC | 6.5% - 17.1% | 11.8% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.67 | 2.49 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 11.50% | 18.80% |
| Tax rate | 9.00% | 19.70% |
| Debt/Equity ratio | 4.36 | 4.36 |
| Cost of debt | 5.90% | 20.90% |
| After-tax WACC | 6.5% | 17.1% |
| Selected WACC | 11.8% | |
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 WW:
cost_of_equity (15.15%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.67) + 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.