BRLT
Brilliant Earth Group Inc
Price:  
1.44 
USD
Volume:  
41,093.00
United States | Specialty Retail
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BRLT WACC - Weighted Average Cost of Capital

The WACC of Brilliant Earth Group Inc (BRLT) is 10.0%.

The Cost of Equity of Brilliant Earth Group Inc (BRLT) is 9.35%.
The Cost of Debt of Brilliant Earth Group Inc (BRLT) is 11.80%.

Range Selected
Cost of equity 8.00% - 10.70% 9.35%
Tax rate 1.10% - 2.20% 1.65%
Cost of debt 8.00% - 15.60% 11.80%
WACC 8.0% - 12.0% 10.0%
WACC

BRLT WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.9 1.04
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.00% 10.70%
Tax rate 1.10% 2.20%
Debt/Equity ratio 0.41 0.41
Cost of debt 8.00% 15.60%
After-tax WACC 8.0% 12.0%
Selected WACC 10.0%

BRLT'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 BRLT:

cost_of_equity (9.35%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.9) + 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.