BXG WACC - Weighted Average Cost of Capital
The WACC of Bluegreen Vacations Corp (BXG) is 6.4%.
| Range | Selected | |
| Cost of equity | 6.7% - 10.5% | 8.6% |
| Tax rate | 22.1% - 26.6% | 24.35% |
| Cost of debt | 4.9% - 5.5% | 5.2% |
| WACC | 5.3% - 7.4% | 6.4% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 4.2% | 5.2% |
| Adjusted beta | 0.84 | 1.21 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.7% | 10.5% |
| Tax rate | 22.1% | 26.6% |
| Debt/Equity ratio | 0.9 | 0.9 |
| Cost of debt | 4.9% | 5.5% |
| After-tax WACC | 5.3% | 7.4% |
| Selected WACC | 6.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| BXG | Bluegreen Vacations Corp | 0.9 | 1.81 | 1.07 |
| ABNB | Airbnb Inc | 0.02 | 1.32 | 1.29 |
| BVH | Bluegreen Vacations Holding Corp | 3.16 | 1.89 | 0.55 |
| CAGU | Castle Group Inc | 1.9 | 0 | 0 |
| GHG | GreenTree Hospitality Group Ltd | 0.16 | 0.6 | 0.53 |
| LHR.V | Lakeview Hotel Investment Corp | 120.4 | 1.39 | 0.01 |
| MCG.V | Mountain China Resorts Holding Ltd | 33.31 | 2.76 | 0.1 |
| PLYA | Playa Hotels & Resorts NV | 0.65 | 0.5 | 0.34 |
| PRSI | Portsmouth Square Inc | 88.81 | 0.52 | 0.01 |
| TRZ.TO | Transat AT Inc | 19.04 | 0.56 | 0.04 |
| Low | High | |
| Unlevered beta | 0.08 | 0.41 |
| Relevered beta | 0.76 | 1.31 |
| Adjusted relevered beta | 0.84 | 1.21 |
BXG'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 BXG:
cost_of_equity (8.60%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (0.84) + 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.