GLRI WACC - Weighted Average Cost of Capital
The WACC of Glori Energy Inc (GLRI) is 6.2%.
| Range | Selected | |
| Cost of equity | 2175.5% - 5782.1% | 3978.8% |
| Tax rate | 0.4% - 0.6% | 0.5% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.7% - 6.8% | 6.2% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 472.1 | 1031.65 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 2175.5% | 5782.1% |
| Tax rate | 0.4% | 0.6% |
| Debt/Equity ratio | 3181.34 | 3181.34 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.7% | 6.8% |
| Selected WACC | 6.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| GLRI | Glori Energy Inc | 3181.34 | 5.16 | 0 |
| Low | High | |
| Unlevered beta | 0 | 0 |
| Relevered beta | 704.13 | 1539.28 |
| Adjusted relevered beta | 472.1 | 1031.65 |
GLRI'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 GLRI:
cost_of_equity (3,978.80%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (472.1) + 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.