GBX
Greenbrier Companies Inc
Price:  
46.69 
USD
Volume:  
440,607.00
United States | Machinery
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GBX WACC - Weighted Average Cost of Capital

The WACC of Greenbrier Companies Inc (GBX) is 7.9%.

The Cost of Equity of Greenbrier Companies Inc (GBX) is 13.60%.
The Cost of Debt of Greenbrier Companies Inc (GBX) is 4.55%.

Range Selected
Cost of equity 11.90% - 15.30% 13.60%
Tax rate 29.00% - 30.80% 29.90%
Cost of debt 4.00% - 5.10% 4.55%
WACC 6.9% - 8.8% 7.9%
WACC

GBX WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.75 1.86
Additional risk adjustments 0.0% 0.5%
Cost of equity 11.90% 15.30%
Tax rate 29.00% 30.80%
Debt/Equity ratio 1.21 1.21
Cost of debt 4.00% 5.10%
After-tax WACC 6.9% 8.8%
Selected WACC 7.9%

GBX'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 GBX:

cost_of_equity (13.60%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.75) + 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.