The WACC of CTPartners Executive Search Inc (CTPR) is 4.5%.
| Range | Selected | |
| Cost of equity | 13,551.90% - 21,251.10% | 17,401.50% |
| Tax rate | 31.30% - 34.40% | 32.85% |
| Cost of debt | 4.70% - 4.90% | 4.80% |
| WACC | 4.2% - 4.7% | 4.5% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 2945.23 | 3793.97 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 13,551.90% | 21,251.10% |
| Tax rate | 31.30% | 34.40% |
| Debt/Equity ratio | 14306.29 | 14306.29 |
| Cost of debt | 4.70% | 4.90% |
| After-tax WACC | 4.2% | 4.7% |
| Selected WACC | 4.5% | |
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 CTPR:
cost_of_equity (17,401.50%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (2945.23) + 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.