GLDD WACC - Weighted Average Cost of Capital
The WACC of Great Lakes Dredge & Dock Corp (GLDD) is 9.3%.
| Range | Selected | |
| Cost of equity | 10.0% - 14.0% | 12% |
| Tax rate | 22.7% - 23.7% | 23.2% |
| Cost of debt | 6.1% - 6.5% | 6.3% |
| WACC | 8.0% - 10.6% | 9.3% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.34 | 1.63 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.0% | 14.0% |
| Tax rate | 22.7% | 23.7% |
| Debt/Equity ratio | 0.61 | 0.61 |
| Cost of debt | 6.1% | 6.5% |
| After-tax WACC | 8.0% | 10.6% |
| Selected WACC | 9.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| GLDD | Great Lakes Dredge & Dock Corp | 0.61 | 1.33 | 0.9 |
| AEGN | Aegion Corp | 0.24 | 1.31 | 1.11 |
| AMRC | Ameresco Inc | 2.27 | 1.14 | 0.42 |
| BAD.TO | Badger Daylighting Ltd | 0.11 | 1.33 | 1.23 |
| BDT.TO | Bird Construction Inc | 0.18 | 1.65 | 1.45 |
| DBMG | DBM Global Inc | 0.11 | 0.36 | 0.33 |
| LMB | Limbach Holdings Inc | 0.02 | 1.8 | 1.78 |
| ORN | Orion Group Holdings Inc | 0.14 | 1.84 | 1.67 |
| ROAD | Construction Partners Inc | 0.09 | 1.57 | 1.47 |
| WLMS | Williams Industrial Services Group Inc | 4.19 | -0.08 | -0.02 |
| Low | High | |
| Unlevered beta | 1.03 | 1.31 |
| Relevered beta | 1.51 | 1.94 |
| Adjusted relevered beta | 1.34 | 1.63 |
GLDD'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 GLDD:
cost_of_equity (12.00%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.34) + 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.