CLPR WACC - Weighted Average Cost of Capital
The WACC of Clipper Realty Inc (CLPR) is 10.3%.
| Range | Selected | |
| Cost of equity | 8.4% - 15.4% | 11.9% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 4.0% - 23.9% | 13.95% |
| WACC | 3.2% - 17.3% | 10.3% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.99 | 1.88 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.4% | 15.4% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 19.55 | 19.55 |
| Cost of debt | 4.0% | 23.9% |
| After-tax WACC | 3.2% | 17.3% |
| Selected WACC | 10.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| CLPR | Clipper Realty Inc | 19.55 | 0.25 | 0.02 |
| BRG | Bluerock Residential Growth REIT Inc | 1.68 | 0.83 | 0.37 |
| BRT | BRT Apartments Corp | 1.68 | 0.76 | 0.34 |
| ELS | Equity LifeStyle Properties Inc | 0.26 | 0.01 | 0.01 |
| ERE.UN.TO | European Residential REIT | 2.33 | 1.42 | 0.53 |
| FCA.UN.V | Firm Capital Apartment Real Estate Investment Trust | 2.31 | 0.14 | 0.05 |
| MRTI | Maxus Realty Trust Inc | 3.04 | 0.24 | 0.07 |
| SOT.UN.TO | Slate Office REIT | 29.33 | 0.73 | 0.03 |
| SUI | Sun Communities Inc | 0.46 | 0.13 | 0.1 |
| UMH | UMH Properties Inc | 0.43 | 0.31 | 0.23 |
| Low | High | |
| Unlevered beta | 0.06 | 0.15 |
| Relevered beta | 0.99 | 2.31 |
| Adjusted relevered beta | 0.99 | 1.88 |
CLPR'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 CLPR:
cost_of_equity (11.90%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.99) + 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.