AC WACC - Weighted Average Cost of Capital
The WACC of Associated Capital Group Inc (AC) is 7.2%.
| Range | Selected | |
| Cost of equity | 6.2% - 8.4% | 7.3% |
| Tax rate | 20.9% - 22.9% | 21.9% |
| Cost of debt | 5.9% - 7.0% | 6.45% |
| WACC | 6.1% - 8.3% | 7.2% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.5 | 0.63 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.2% | 8.4% |
| Tax rate | 20.9% | 22.9% |
| Debt/Equity ratio | 0.01 | 0.01 |
| Cost of debt | 5.9% | 7.0% |
| After-tax WACC | 6.1% | 8.3% |
| Selected WACC | 7.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| AC | Associated Capital Group Inc | 0.01 | 0.7 | 0.7 |
| AD.UN.TO | Alaris Equity Partners Income Trust | 0.08 | 1.36 | 1.28 |
| BBDC | Barings BDC Inc | 1.52 | 0.57 | 0.26 |
| CCAP | Crescent Capital BDC Inc | 1.48 | 0.51 | 0.24 |
| CVG.TO | Clairvest Group Inc | 0 | 0.26 | 0.26 |
| MOVE.CN | Clean Power Capital Corp | 0 | 0.91 | 0.91 |
| NEWT | Newtek Business Services Corp | 5.93 | 1.24 | 0.22 |
| SAR | Saratoga Investment Corp | 2.34 | 0.42 | 0.15 |
| SEC.TO | Senvest Capital Inc | 0.02 | 0.91 | 0.9 |
| WHF | WhiteHorse Finance Inc | 1.69 | 0.32 | 0.14 |
| Low | High | |
| Unlevered beta | 0.25 | 0.44 |
| Relevered beta | 0.25 | 0.45 |
| Adjusted relevered beta | 0.5 | 0.63 |
AC'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 AC:
cost_of_equity (7.30%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.5) + 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.