AGFS WACC - Weighted Average Cost of Capital
The WACC of AgroFresh Solutions Inc (AGFS) is 4.6%.
| Range | Selected | |
| Cost of equity | 5.4% - 8.1% | 6.75% |
| Tax rate | 21.0% - 48.9% | 34.95% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 4.5% - 4.7% | 4.6% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.34 | 0.58 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.4% | 8.1% |
| Tax rate | 21.0% | 48.9% |
| Debt/Equity ratio | 1.6 | 1.6 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 4.5% | 4.7% |
| Selected WACC | 4.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| AGFS | AgroFresh Solutions Inc | 1.6 | 1.06 | 0.51 |
| AVD | American Vanguard Corp | 1.07 | 0.98 | 0.57 |
| CGA | China Green Agriculture Inc | 0.62 | -0.03 | -0.02 |
| CHBU | China Agri-Business Inc | 0.04 | 1.16 | 1.13 |
| GREN | Greensmart Corp | 0.32 | 0 | 0 |
| IFOS.V | Itafos | 0.28 | 0.01 | 0.01 |
| IGNE | Igene Biotechnology Inc | 931.63 | 0 | 0 |
| MBII | Marrone Bio Innovations Inc | 0.18 | 0.36 | 0.32 |
| NZP.V | Chatham Rock Phosphate Ltd | 0.01 | -0.57 | -0.56 |
| UAN | CVR Partners LP | 0.61 | 0.65 | 0.46 |
| Low | High | |
| Unlevered beta | 0 | 0.38 |
| Relevered beta | 0.01 | 0.37 |
| Adjusted relevered beta | 0.34 | 0.58 |
AGFS'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 AGFS:
cost_of_equity (6.75%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.34) + 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.