BGFV
Big 5 Sporting Goods Corp
Price:  
0.95 
USD
Volume:  
73,785.00
United States | Specialty Retail
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BGFV WACC - Weighted Average Cost of Capital

The WACC of Big 5 Sporting Goods Corp (BGFV) is 7.8%.

The Cost of Equity of Big 5 Sporting Goods Corp (BGFV) is 9.95%.
The Cost of Debt of Big 5 Sporting Goods Corp (BGFV) is 7.85%.

Range Selected
Cost of equity 8.30% - 11.60% 9.95%
Tax rate 23.40% - 24.40% 23.90%
Cost of debt 7.00% - 8.70% 7.85%
WACC 6.7% - 8.9% 7.8%
WACC

BGFV WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.96 1.21
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.30% 11.60%
Tax rate 23.40% 24.40%
Debt/Equity ratio 1.2 1.2
Cost of debt 7.00% 8.70%
After-tax WACC 6.7% 8.9%
Selected WACC 7.8%

BGFV'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 BGFV:

cost_of_equity (9.95%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.96) + 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.