GADS WACC - Weighted Average Cost of Capital
The WACC of Gadsden Properties Inc (GADS) is 7.2%.
| Range | Selected | |
| Cost of equity | 6.5% - 17.1% | 11.8% |
| Tax rate | 0.9% - 3.4% | 2.15% |
| Cost of debt | 7.0% - 7.0% | 7% |
| WACC | 6.9% - 7.5% | 7.2% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.56 | 2.18 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.5% | 17.1% |
| Tax rate | 0.9% | 3.4% |
| Debt/Equity ratio | 13.07 | 13.07 |
| Cost of debt | 7.0% | 7.0% |
| After-tax WACC | 6.9% | 7.5% |
| Selected WACC | 7.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| GADS | Gadsden Properties Inc | 13.07 | 21.34 | 1.55 |
| Low | High | |
| Unlevered beta | 1.55 | 1.55 |
| Relevered beta | 0.34 | 2.76 |
| Adjusted relevered beta | 0.56 | 2.18 |
GADS'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 GADS:
cost_of_equity (11.80%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.56) + 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.