GPRE WACC - Weighted Average Cost of Capital
The WACC of Green Plains Inc (GPRE) is 6.4%.
| Range | Selected | |
| Cost of equity | 5.5% - 9.9% | 7.7% |
| Tax rate | 5.2% - 6.0% | 5.6% |
| Cost of debt | 5.2% - 7.0% | 6.1% |
| WACC | 5.1% - 7.6% | 6.4% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.35 | 0.91 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.5% | 9.9% |
| Tax rate | 5.2% | 6.0% |
| Debt/Equity ratio | 2.16 | 2.16 |
| Cost of debt | 5.2% | 7.0% |
| After-tax WACC | 5.1% | 7.6% |
| Selected WACC | 6.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| GPRE | Green Plains Inc | 2.16 | 0.79 | 0.26 |
| ALTO | Alto Ingredients Inc | 1.4 | 0.8 | 0.34 |
| BDCO | Blue Dolphin Energy Co | 2.18 | -0.62 | -0.2 |
| CLMT | Calumet Specialty Products Partners LP | 2.2 | 1.79 | 0.58 |
| GFGY | Granite Falls Energy LLC | 0.36 | -0.07 | -0.05 |
| GIII.V | Gen III Oil Corp | 0.12 | -0.07 | -0.06 |
| PARR | Par Pacific Holdings Inc | 1.16 | 0.66 | 0.32 |
| PTOI | Plastic2Oil Inc | 14.07 | 0.1 | 0.01 |
| REGI | Renewable Energy Group Inc | 0.17 | 0.58 | 0.5 |
| VTNR | Vertex Energy Inc | 72.03 | 1.02 | 0.01 |
| Low | High | |
| Unlevered beta | 0.01 | 0.28 |
| Relevered beta | 0.03 | 0.87 |
| Adjusted relevered beta | 0.35 | 0.91 |
GPRE'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 GPRE:
cost_of_equity (7.70%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.35) + 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.