GURUFOCUS.COM » STOCK LIST » Communication Services » Interactive Media » Bankrate Inc (STU:7BK) » Definitions » WACC %

Bankrate (STU:7BK) WACC % :9.58% (As of Jun. 14, 2024)


View and export this data going back to 2013. Start your Free Trial

What is Bankrate WACC %?

As of today (2024-06-14), Bankrate's weighted average cost of capital is 9.58%%. Bankrate's ROIC % is 0.00% (calculated using TTM income statement data). Bankrate 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.

For a comprehensive WACC calculation, please access the WACC Calculator.


Bankrate WACC % Historical Data

The historical data trend for Bankrate'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.

Bankrate WACC % Chart

Bankrate Annual Data
Trend Dec07 Dec08 Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Dec16
WACC %
Get a 7-Day Free Trial Premium Member Only Premium Member Only - 14.34 9.25 0.21 8.51

Bankrate Quarterly Data
Sep12 Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17
WACC % Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -8.55 7.87 8.51 7.03 7.96

Competitive Comparison of Bankrate's WACC %

For the Internet Content & Information subindustry, Bankrate'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.


Bankrate's WACC % Distribution in the Interactive Media Industry

For the Interactive Media industry and Communication Services sector, Bankrate's WACC % distribution charts can be found below:

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



Bankrate 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, Bankrate's market capitalization (E) is €1083.183 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 one-year quarterly average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together. As of Jun. 2017, Bankrate's latest one-year quarterly average Book Value of Debt (D) is €269.359 Mil.
a) weight of equity = E / (E + D) = 1083.183 / (1083.183 + 269.359) = 0.8008
b) weight of debt = D / (E + D) = 269.359 / (1083.183 + 269.359) = 0.1992

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 4.204%. 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. Bankrate'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 = 4.204% + 1 * 6% = 10.204%

3. Cost of Debt:
GuruFocus uses latest TTM Interest Expense divided by the latest one-year quarterly average debt to get the simplified cost of debt.
As of Jun. 2017, Bankrate's interest expense (positive number) was €18.99 Mil. Its total Book Value of Debt (D) is €269.359 Mil.
Cost of Debt = 18.99 / 269.359 = 7.0501%.

4. Multiply by one minus TTM Tax Rate:
GuruFocus uses the most recent TTM Tax Expense divided by the most recent TTM Pre-Tax Income to calculate the tax rate. The calculated TTM tax rate is limited to between 0% and 100%. If the calculated tax rate is higher than 100%, it is set to 100%. If the calculated tax rate is less than 0%, it is set to 0%.
The latest calculated TTM Tax Rate = 0.802 / -19.234 = -4.17%, which is less than 0%. Therefore it's set to 0%.

Bankrate'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)
=0.8008*10.204%+0.1992*7.0501%*(1 - 0%)
=9.58%

* 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.


Bankrate  (STU:7BK) 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, Bankrate's weighted average cost of capital is 9.58%%. Bankrate's ROIC % is 0.00% (calculated using TTM income statement data). Bankrate 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 one-year quarterly average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together.
For companies that report quarterly, GuruFocus combines all of the most recent year's quarterly debt data from the beginning of the year to the year-end and calculates the average.
For companies that report semi-annually, GuruFocus combines all of the most recent year's semi-annual debt data from the start of the year to the year-end and calculates the average.
For companies that report annually, GuruFocus combines the beginning and ending annual debt data from the most recent year and then calculates the average.

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 the latest TTM Interest Expense divided by the latest one-year quarterly average debt to get the simplified cost of debt.


Related Terms

Bankrate (STU:7BK) Business Description

Traded in Other Exchanges
N/A
Address
Bankrate Inc was founded in 1976 and Bankrate, Inc. was incorporated in the State of Delaware in 2011. The Company owns and operates an Internet-based consumer banking, personal finance and senior care online network. Its flagship websites include CreditCards.com, Bankrate.com, and Caring.com which provides information on more than 300 financial and senior care products and services, including credit cards, mortgages, deposits, and other personal finance categories. Additionally, it provide financial applications and information to a network of distribution partners and through national and state publications. It has three reportable segments including Credit cards, Banking, Senior Care and other.

Bankrate (STU:7BK) Headlines

No Headlines