CWGL WACC - Weighted Average Cost of Capital
The WACC of Crimson Wine Group Ltd (CWGL) is 6.2%.
| Range | Selected | |
| Cost of equity | 5.5% - 7.5% | 6.5% |
| Tax rate | 25.3% - 26.4% | 25.85% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.3% - 7.0% | 6.2% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.37 | 0.46 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.5% | 7.5% |
| Tax rate | 25.3% | 26.4% |
| Debt/Equity ratio | 0.14 | 0.14 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.3% | 7.0% |
| Selected WACC | 6.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| CWGL | Crimson Wine Group Ltd | 0.14 | 0.06 | 0.05 |
| ADW.A.TO | Andrew Peller Ltd | 1.15 | 0.5 | 0.27 |
| CSW.A.TO | Corby Spirit and Wine Ltd | 0.32 | 0.04 | 0.04 |
| MGPI | MGP Ingredients Inc | 0.46 | 0.87 | 0.65 |
| RSAU | Rooshine Inc | 13.4 | -0.82 | -0.08 |
| STZ | Constellation Brands Inc | 0.34 | 0.41 | 0.33 |
| THST | Truett-Hurst Inc | 50.34 | -0.82 | -0.02 |
| WBR.TO | Waterloo Brewing Ltd | 0.51 | 0.69 | 0.5 |
| WVVI | Willamette Valley Vineyards Inc | 0.62 | 0.06 | 0.04 |
| MASI.MI | Masi Agricola SpA | 0.41 | 0.16 | 0.12 |
| Low | High | |
| Unlevered beta | 0.05 | 0.18 |
| Relevered beta | 0.06 | 0.19 |
| Adjusted relevered beta | 0.37 | 0.46 |
CWGL'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 CWGL:
cost_of_equity (6.50%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.37) + 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.