ELS
Equity LifeStyle Properties Inc
Price:  
62.80 
USD
Volume:  
1,589,670.00
United States | Equity Real Estate Investment Trusts (REITs)
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ELS WACC - Weighted Average Cost of Capital

The WACC of Equity LifeStyle Properties Inc (ELS) is 5.8%.

The Cost of Equity of Equity LifeStyle Properties Inc (ELS) is 6.45%.
The Cost of Debt of Equity LifeStyle Properties Inc (ELS) is 4.80%.

Range Selected
Cost of equity 5.70% - 7.20% 6.45%
Tax rate 26.20% - 27.00% 26.60%
Cost of debt 4.00% - 5.60% 4.80%
WACC 5.1% - 6.6% 5.8%
WACC

ELS WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.4 0.42
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.70% 7.20%
Tax rate 26.20% 27.00%
Debt/Equity ratio 0.27 0.27
Cost of debt 4.00% 5.60%
After-tax WACC 5.1% 6.6%
Selected WACC 5.8%

ELS'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 ELS:

cost_of_equity (6.45%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.4) + 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.