The WACC of Global Ecology Corp (GLEC) is 4.0%.
Range | Selected | |
Cost of equity | 6.8% - 49.7% | 28.25% |
Tax rate | 26.2% - 27.0% | 26.6% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 3.7% - 4.2% | 4.0% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 4.6% | 5.6% |
Adjusted beta | 0.64 | 8 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 6.8% | 49.7% |
Tax rate | 26.2% | 27.0% |
Debt/Equity ratio | 76.26 | 76.26 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 3.7% | 4.2% |
Selected WACC | 4.0% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
GLEC | Global Ecology Corp | 76.26 | -113.44 | -2 |
AWX | Avalon Holdings Corp | 3.53 | 0.03 | 0.01 |
BNET | Bion Environmental Technologies Inc | 0.36 | 1.78 | 1.41 |
CHRA | Charah Solutions Inc | 9.29 | 1.15 | 0.15 |
CREG | China Recycling Energy Corp | 0.29 | 1.45 | 1.2 |
EWK.V | Earthworks Industries Inc | 0.72 | -0.25 | -0.16 |
HCCI | Heritage-Crystal Clean Inc | 0.12 | 0.31 | 0.28 |
KUT.V | Redishred Capital Corp (Pre-Merger) | 0.39 | 0.01 | 0.01 |
NNRI | NNRF Inc | 0.04 | 1.77 | 1.72 |
TEXC | Texcom Inc | 22.58 | -1.66 | -0.1 |
Low | High | |
Unlevered beta | 0.01 | 0.2 |
Relevered beta | 0.46 | 11.45 |
Adjusted relevered beta | 0.64 | 8 |
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 GLEC:
cost_of_equity (28.25%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.64) + 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.