WWE
World Wrestling Entertainment Inc
Price:  
100.65 
USD
Volume:  
1,642,130
United States | Entertainment

WWE WACC - Weighted Average Cost of Capital

The WACC of World Wrestling Entertainment Inc (WWE) is 6.6%.

The Cost of Equity of World Wrestling Entertainment Inc (WWE) is 6.75%.
The Cost of Debt of World Wrestling Entertainment Inc (WWE) is 4.3%.

RangeSelected
Cost of equity5.5% - 8.0%6.75%
Tax rate21.1% - 22.9%22%
Cost of debt4.0% - 4.6%4.3%
WACC5.4% - 7.8%6.6%
WACC

WWE WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta0.360.56
Additional risk adjustments0.0%0.5%
Cost of equity5.5%8.0%
Tax rate21.1%22.9%
Debt/Equity ratio
0.050.05
Cost of debt4.0%4.6%
After-tax WACC5.4%7.8%
Selected WACC6.6%

WWE'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 WWE:

cost_of_equity (6.75%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.36) + 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.