GPRE
Green Plains Inc
Price:  
3.81 
USD
Volume:  
910,544.00
United States | Oil, Gas & Consumable Fuels
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GPRE WACC - Weighted Average Cost of Capital

The WACC of Green Plains Inc (GPRE) is 6.3%.

The Cost of Equity of Green Plains Inc (GPRE) is 7.60%.
The Cost of Debt of Green Plains Inc (GPRE) is 6.10%.

Range Selected
Cost of equity 5.50% - 9.70% 7.60%
Tax rate 5.20% - 6.00% 5.60%
Cost of debt 5.20% - 7.00% 6.10%
WACC 5.1% - 7.5% 6.3%
WACC

GPRE WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.35 0.86
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.50% 9.70%
Tax rate 5.20% 6.00%
Debt/Equity ratio 2.31 2.31
Cost of debt 5.20% 7.00%
After-tax WACC 5.1% 7.5%
Selected WACC 6.3%

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 (7.60%) = 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.