GHL
Greenhill & Co Inc
Price:  
14.99 
USD
Volume:  
720,115.00
United States | Capital Markets
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GHL WACC - Weighted Average Cost of Capital

The WACC of Greenhill & Co Inc (GHL) is 5.7%.

The Cost of Equity of Greenhill & Co Inc (GHL) is 7.35%.
The Cost of Debt of Greenhill & Co Inc (GHL) is 5.90%.

Range Selected
Cost of equity 6.00% - 8.70% 7.35%
Tax rate 31.10% - 33.80% 32.45%
Cost of debt 4.80% - 7.00% 5.90%
WACC 4.7% - 6.7% 5.7%
WACC

GHL WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.47 0.68
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.00% 8.70%
Tax rate 31.10% 33.80%
Debt/Equity ratio 0.96 0.96
Cost of debt 4.80% 7.00%
After-tax WACC 4.7% 6.7%
Selected WACC 5.7%

GHL'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 GHL:

cost_of_equity (7.35%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.47) + 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.