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ZoomInfo Technologies WACC %

:7.65 (As of Today)
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As of today (2021-10-26), ZoomInfo Technologies's weighted average cost of capital is 7.65%. ZoomInfo Technologies's ROIC % is 2.48% (calculated using TTM income statement data). ZoomInfo Technologies earns returns that do not match up to its cost of capital. It will destroy value as it grows.

*Note: The beta of this company cannot be obtained because it has a price history shorter than 3 years. It will thus be set to 1 as default to calculate WACC.


ZoomInfo Technologies WACC % Historical Data

The historical data trend for ZoomInfo Technologies's WACC % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

ZoomInfo Technologies Annual Data
Trend Dec18 Dec19 Dec20
WACC %
- - 7.06

ZoomInfo Technologies Quarterly Data
Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21
WACC % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only - 6.93 7.06 7.62 7.26

Competitive Comparison

For the Software - Application subindustry, ZoomInfo Technologies's WACC %, along with its competitors' market caps and WACC % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

   

ZoomInfo Technologies WACC % Distribution

For the Software industry and Technology sector, ZoomInfo Technologies's WACC % distribution charts can be found below:

* The bar in red indicates where ZoomInfo Technologies's WACC % falls into.



ZoomInfo Technologies WACC % Calculation

The weighted average cost of capital (WACC) is the rate that a company is expected to pay on average to all its security holders to finance its assets. The WACC is commonly referred to as the firm's cost of capital. Generally speaking, a company's assets are financed by debt and equity. WACC is the average of the costs of these sources of financing, each of which is weighted by its respective use in the given situation. By taking a weighted average, we can see how much interest the company has to pay for every dollar it finances.

WACC=E/(E + D)*Cost of Equity+D/(E + D)*Cost of Debt*(1 - Tax Rate)

1. Weights:
Generally speaking, a company's assets are financed by debt and equity. We need to calculate the weight of equity and the weight of debt.
The market value of equity (E) is also called "Market Cap". As of today, ZoomInfo Technologies's market capitalization (E) is $27264.360 Mil.
The market value of debt is typically difficult to calculate, therefore, GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding the latest two-year average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together. As of Jun. 2021, ZoomInfo Technologies's latest two-year average Short-Term Debt & Capital Lease Obligation was $9.35 Mil and its latest two-year average Long-Term Debt & Capital Lease Obligation was $1006.9 Mil. The total Book Value of Debt (D) is $1016.25 Mil.
a) weight of equity = E / (E + D) = 27264.360 / (27264.360 + 1016.25) = 0.9641
b) weight of debt = D / (E + D) = 1016.25 / (27264.360 + 1016.25) = 0.0359

2. Cost of Equity:
GuruFocus uses Capital Asset Pricing Model (CAPM) to calculate the required rate of return. The formula is:
Cost of Equity = Risk-Free Rate of Return + Beta of Asset * (Expected Return of the Market - Risk-Free Rate of Return)
a) GuruFocus uses 10-Year Treasury Constant Maturity Rate as the risk-free rate. It is updated daily. The current risk-free rate is 1.68000000%. Please go to Economic Indicators page for more information. Please note that we use the 10-Year Treasury Constant Maturity Rate of the country/region where the company is headquartered. If the data for that country/region is not available, then we will use the 10-Year Treasury Constant Maturity Rate of the United States as default.
b) Beta is the sensitivity of the expected excess asset returns to the expected excess market returns. ZoomInfo Technologies's beta cannot be obtained because it has a price history shorter than 3 years. It will thus be set to 1 as default to calculate WACC.
c) (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
Cost of Equity = 1.68000000% + 1 * 6% = 7.68%

3. Cost of Debt:
GuruFocus uses last fiscal year end Interest Expense divided by the latest two-year average debt to get the simplified cost of debt.
As of Dec. 2020, ZoomInfo Technologies's interest expense (positive number) was $69.3 Mil. Its total Book Value of Debt (D) is $1016.25 Mil.
Cost of Debt = 69.3 / 1016.25 = 6.8192%.

4. Multiply by one minus Average Tax Rate:
GuruFocus uses the latest two-year average tax rate to do the calculation. The calculated average tax rate is limited to between 0% and 100%. If the calculated average tax rate is higher than 100%, it is set to 100%. If the calculated average tax rate is less than 0%, it is set to 0%.
The latest Two-year Average Tax Rate is less than 0%, and it's set to 0%.

ZoomInfo Technologies's Weighted Average Cost Of Capital (WACC) for Today is calculated as:

WACC=E / (E + D)*Cost of Equity+D / (E + D)*Cost of Debt*(1 - Tax Rate)
=0.9641*7.68%+0.0359*6.8192%*(1 - 0%)
=7.65%

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


ZoomInfo Technologies  (NAS:ZI) WACC % Explanation

Because it costs money to raise capital. A firm that generates higher ROIC % than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.

As of today, ZoomInfo Technologies's weighted average cost of capital is 7.65%. ZoomInfo Technologies's ROIC % is 2.48% (calculated using TTM income statement data). ZoomInfo Technologies earns returns that do not match up to its cost of capital. It will destroy value as it grows.

*Note: The beta of this company cannot be obtained because it has a price history shorter than 3 years. It will thus be set to 1 as default to calculate WACC.


Be Aware

1. GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding latest two-year average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together.

2. The WACC formula discussed above does not include Preferred Stock. Please adjust if preferred stock is considered.

3. (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.

4. GuruFocus uses last fiscal year end Interest Expense divided by the latest two-year average debt to get the simplified cost of debt.


Related Terms

ZoomInfo Technologies Business Description

ZoomInfo Technologies logo
Industry
Technology » Software NAICS : 511210 SIC : 7372
Comparable Companies
Traded in Other Exchanges
N/A
Address
805 Broadway Street, Suite 900, Vancouver, WA, USA, 98660
ZoomInfo Technologies Inc provides a go-to-market intelligence platform for sales and marketing teams. Its cloud-based go-to-market data and insights platform deliver comprehensive and high-quality intelligence and analytics to provide sales and marketing professionals with accurate information and insights on the organizations and professionals. Geographically, the company has its presence across the United States.
Executives
Tc Group, Llc 10 percent owner C/O CARLYLE GROUP 1001 PENNSYLVANIA AVENUE NW SUITE 220 S WASHINGTON DC 20004
Cp Vi Evergreen Holdings, L.p. 10 percent owner C/O THE CARLYLE GROUP, SUITE 220 SOUTH 1001 PENNSYLVANIA AVENUE, N.W. WASHINGTON DC 20004
Carlyle Partners Vi Dash Holdings, L.p. 10 percent owner C/O THE CARLYLE GROUP, SUITE 220 SOUTH 1001 PENNSYLVANIA AVENUE, N.W. WASHINGTON DC 20002
Carlyle Partners Vi Evergreen Holdings, L.p. 10 percent owner C/O THE CARLYLE GROUP, SUITE 200 SOUTH 1001 PENNSYLVANIA AVENUE, N.W. WASHINGTON DC 20004
Tc Group Vi, L.l.c. 10 percent owner C/O THE CARLYLE GROUP, SUITE 220 SOUTH 1001 PENNSYLVANIA ANVENE, N.W. WASHINGTON DC 20004
Tc Group Vi, L.p. 10 percent owner C/O THE CARLYLE GROUP, SUITE 220 SOUTH 1001 PENNSYLVANIA AVENUE, N.W. WASHINGTON DC 20004
Tc Group Vi S1, L.l.c. 10 percent owner C/O THE CARLYLE GROUP. SUITE 220 SOUTH 1001 PENNSYLVANIA AVENUE, N.W. WASHINGTON DC 20004
Tc Group Vi S1, L.p. 10 percent owner C/O THE CARLYLE GROUP, SUITE 220 SOUTH 1001 PENNSYLVANIA AVENUE, N.W. WASHINGTON DC 20004
Tc Group Sub L.p. 10 percent owner C/O THE CARLYLE GROUP L.P. 1001 PENNSYLVANIA AVENUE, NW WASHINGTON DC 20004-2505
Carlyle Holdings I L.p. 10 percent owner C/O THE CARLYLE GROUP L.P. 1001 PENNSYLVANIA AVENUE, NW WASHINGTON DC 20004-2505
Carlyle Holdings I Gp Sub L.l.c. 10 percent owner C/O THE CARLYLE GROUP L.P. 1001 PENNSYLVANIA AVENUE, NW WASHINGTON DC 20004-2505
Cg Subsidiary Holdings L.l.c. 10 percent owner C/O THE CARLYLE GROUP, SUITE 220 SOUTH 1001 PENNSYLVANIA AVENUE, N.W. WASHINGTON DC 20004
Tc Group Cayman Investment Holdings, L.p. 10 percent owner C/O WALKERS CORPORATE SERVICES LIMITED 190 ELGIN AVENUE GEORGE TOWN, GRAND CAYMAN E9 KY1-9001
Carlyle Group Inc. 10 percent owner C/O THE CARLYLE GROUP 1001 PENNSYLVANIA AVENUE, N.W. WASHINGTON DC 20004
Carlyle Group Management L.l.c. 10 percent owner C/O THE CARLYLE GROUP L.P. 1001 PENNSYLVANIA AVENUE, NW WASHINGTON DC 20004-2505

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