GNL WACC - Weighted Average Cost of Capital
The WACC of Global Net Lease Inc (GNL) is 6.9%.
| Range | Selected | |
| Cost of equity | 5.9% - 9.5% | 7.7% |
| Tax rate | 22.0% - 38.2% | 30.1% |
| Cost of debt | 4.4% - 15.6% | 10% |
| WACC | 4.1% - 9.6% | 6.9% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.44 | 0.82 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.9% | 9.5% |
| Tax rate | 22.0% | 38.2% |
| Debt/Equity ratio | 2.56 | 2.56 |
| Cost of debt | 4.4% | 15.6% |
| After-tax WACC | 4.1% | 9.6% |
| Selected WACC | 6.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| GNL | Global Net Lease Inc | 2.56 | 0.07 | 0.03 |
| AAT | American Assets Trust Inc | 1.73 | 0.65 | 0.3 |
| AHH | Armada Hoffler Properties Inc | 1.95 | 0.78 | 0.34 |
| ALEX | Alexander & Baldwin Inc (Hawaii) | 0.38 | 0.31 | 0.25 |
| AX.UN.TO | Artis Real Estate Investment Trust | 1.61 | 0.8 | 0.38 |
| FREVS | First Real Estate Investment Trust of New Jersey | 1.05 | -0.01 | -0.01 |
| MRT.UN.TO | Morguard Real Estate Investment Trust | 3.22 | 0.22 | 0.07 |
| PINE | Alpine Income Property Trust Inc | 1.47 | -0.07 | -0.03 |
| SQFT | Presidio Property Trust Inc | 14.01 | 0.46 | 0.04 |
| WRE | Washington Real Estate Investment Trust | 0.36 | 0.89 | 0.72 |
| Low | High | |
| Unlevered beta | 0.06 | 0.27 |
| Relevered beta | 0.16 | 0.73 |
| Adjusted relevered beta | 0.44 | 0.82 |
GNL'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 GNL:
cost_of_equity (7.70%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.44) + 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.