Western Asset Mortgage Capital Corp (WMC) WACC Analysis

As of June 14, 2025, Western Asset Mortgage Capital Corp (WMC) carries a Weighted Average Cost of Capital (WACC) of 5.5%. WACC reflects the blended rate Western Asset Mortgage Capital Corp must pay to both equity and debt holders.

Within that, the cost of equity is 6.7%, the cost of debt is 4.0%, and the effective tax rate is 0.2%.

Breakdown of WACC Components

• Long-term bond rate: 3.9% – 4.4%
• Equity market risk premium: 4.6% – 5.6%
• Adjusted beta: 0.61 – 0.87
• Additional risk adjustment: 0.0% – 0.5%
• Debt-to-equity ratio: 42.05

What It Means for Investors

With a selected WACC of 5.5%, Western Asset Mortgage Capital Corp must ensure any new investment returns exceed this threshold to generate shareholder value. This level reflects an attractive low cost of capital.