The WACC of Global Green Solutions Inc (GGRN) is 5.6%.
Range | Selected | |
Cost of equity | 8.2% - 10.9% | 9.55% |
Tax rate | 27.0% - 27.0% | 27% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 5.2% - 6.1% | 5.6% |
Category | Low | High |
Long-term bond rate | 3.2% | 3.7% |
Equity market risk premium | 4.2% | 5.2% |
Adjusted beta | 1.19 | 1.28 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 8.2% | 10.9% |
Tax rate | 27.0% | 27.0% |
Debt/Equity ratio | 1.98 | 1.98 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 5.2% | 6.1% |
Selected WACC | 5.6% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
GGRN | Global Green Solutions Inc | 1.98 | 1.21 | 0.49 |
AEC.V | Anfield Energy Inc | 0.07 | 4.06 | 3.86 |
AMR.V | AM Resources Corp | 0.05 | -0.24 | -0.24 |
AREC | American Resources Corp | 3.1 | 1.13 | 0.35 |
BMSPF | Biomass Secure Power Inc | 0.19 | 11.23 | 9.83 |
BOPO | Biopower Operations Corp | 540.53 | -68.84 | -0.17 |
EVA | Enviva Partners LP | 159280 | 4.02 | 0 |
PL.TO | Pinnacle Renewable Energy Inc | 1.28 | 1.06 | 0.55 |
RGGI | Resgreen Group International Inc | 77.5 | -25 | -0.43 |
SRI.V | Sparton Resources Inc | 0.07 | 1.68 | 1.6 |
Low | High | |
Unlevered beta | 0.21 | 0.51 |
Relevered beta | 1.28 | 1.42 |
Adjusted relevered beta | 1.19 | 1.28 |
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 GGRN:
cost_of_equity (9.55%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (1.19) + 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.