GPX WACC - Weighted Average Cost of Capital

The WACC of GP Strategies Corp (GPX) is 9.0%.

The Cost of Equity of GP Strategies Corp (GPX) is 9.15%.

The Cost of Debt of GP Strategies Corp (GPX) is 4.25%.

	Range	Selected
Cost of equity	7.40% - 10.90%	9.15%
Tax rate	26.60% - 32.40%	29.50%
Cost of debt	4.00% - 4.50%	4.25%
WACC	7.3% - 10.6%	9.0%

WACC

GPX WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	4.2%	5.2%
Adjusted beta	1.01	1.28

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.40%	10.90%

Tax rate	26.60%	32.40%
Debt/Equity ratio	0.03	0.03
Cost of debt	4.00%	4.50%

After-tax WACC	7.3%	10.6%


Selected WACC	9.0%

GPX'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 GPX:

cost_of_equity (9.15%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (1.01) + 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.