XRX
Xerox Holdings Corp
Price:  
5.31 
USD
Volume:  
5,366,211.00
United States | Technology Hardware, Storage & Peripherals
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Xerox WACC - Weighted Average Cost of Capital

The WACC of Xerox Holdings Corp (XRX) is 13.2%.

The Cost of Equity of Xerox Holdings Corp (XRX) is 16.55%.
The Cost of Debt of Xerox Holdings Corp (XRX) is 14.65%.

Range Selected
Cost of equity 13.60% - 19.50% 16.55%
Tax rate 6.60% - 15.30% 10.95%
Cost of debt 5.40% - 23.90% 14.65%
WACC 6.3% - 20.1% 13.2%
WACC

Xerox WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 2.11 2.61
Additional risk adjustments 0.0% 0.5%
Cost of equity 13.60% 19.50%
Tax rate 6.60% 15.30%
Debt/Equity ratio 5.67 5.67
Cost of debt 5.40% 23.90%
After-tax WACC 6.3% 20.1%
Selected WACC 13.2%

Xerox'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 Xerox:

cost_of_equity (16.55%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (2.11) + 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.