GFF
Griffon Corp
Price:  
73.05 
USD
Volume:  
490,187
United States | Building Products

GFF WACC - Weighted Average Cost of Capital

The WACC of Griffon Corp (GFF) is 8.0%.

The Cost of Equity of Griffon Corp (GFF) is 9.95%.
The Cost of Debt of Griffon Corp (GFF) is 5.85%.

RangeSelected
Cost of equity8.8% - 11.1%9.95%
Tax rate30.4% - 33.0%31.7%
Cost of debt5.1% - 6.6%5.85%
WACC7.1% - 9.0%8.0%
WACC

GFF WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta1.061.11
Additional risk adjustments0.0%0.5%
Cost of equity8.8%11.1%
Tax rate30.4%33.0%
Debt/Equity ratio
0.470.47
Cost of debt5.1%6.6%
After-tax WACC7.1%9.0%
Selected WACC8.0%

GFF'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 GFF:

cost_of_equity (9.95%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.06) + 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.