CLPR
Clipper Realty Inc
Price:  
3.87 
USD
Volume:  
90,534.00
United States | Equity Real Estate Investment Trusts (REITs)
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CLPR WACC - Weighted Average Cost of Capital

The WACC of Clipper Realty Inc (CLPR) is 10.3%.

The Cost of Equity of Clipper Realty Inc (CLPR) is 12.10%.
The Cost of Debt of Clipper Realty Inc (CLPR) is 13.95%.

Range Selected
Cost of equity 9.20% - 15.00% 12.10%
Tax rate 26.20% - 27.00% 26.60%
Cost of debt 4.00% - 23.90% 13.95%
WACC 3.2% - 17.3% 10.3%
WACC

CLPR WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.15 1.81
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.20% 15.00%
Tax rate 26.20% 27.00%
Debt/Equity ratio 20.63 20.63
Cost of debt 4.00% 23.90%
After-tax WACC 3.2% 17.3%
Selected WACC 10.3%

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 (12.10%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.15) + 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.