The WACC of Global Brokerage Inc (GLBR) is 12.9%.
| Range | Selected | |
| Cost of equity | 5.30% - 247,301.80% | 123,653.55% |
| Tax rate | 20.70% - 24.60% | 22.65% |
| Cost of debt | 9.20% - 23.90% | 16.55% |
| WACC | 7.3% - 18.5% | 12.9% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | -286.53 | 43924.55 |
| Additional risk adjustments | 1319.5% | 1320.0% |
| Cost of equity | 5.30% | 247,301.80% |
| Tax rate | 20.70% | 24.60% |
| Debt/Equity ratio | 508047.23 | 508047.23 |
| Cost of debt | 9.20% | 23.90% |
| After-tax WACC | 7.3% | 18.5% |
| Selected WACC | 12.9% | |
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 GLBR:
cost_of_equity (123,653.55%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (-286.53) + risk_adjustments (1,319.75%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.