GRA WACC - Weighted Average Cost of Capital
The WACC of W R Grace & Co (GRA) is 6.6%.
| Range | Selected | |
| Cost of equity | 6.8% - 9.4% | 8.1% |
| Tax rate | 33.7% - 36.9% | 35.3% |
| Cost of debt | 4.0% - 5.5% | 4.75% |
| WACC | 5.5% - 7.6% | 6.6% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 4.2% | 5.2% |
| Adjusted beta | 0.85 | 1.01 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.8% | 9.4% |
| Tax rate | 33.7% | 36.9% |
| Debt/Equity ratio | 0.43 | 0.43 |
| Cost of debt | 4.0% | 5.5% |
| After-tax WACC | 5.5% | 7.6% |
| Selected WACC | 6.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| GRA | W R Grace & Co | 0.43 | 1.44 | 1.13 |
| ADES | Advanced Emissions Solutions Inc | 0.04 | 0.6 | 0.59 |
| BCPC | Balchem Corp | 0.04 | 0.54 | 0.53 |
| ESI | Element Solutions Inc | 0.33 | 1.21 | 0.99 |
| KWR | Quaker Chemical Corp | 0.35 | 1.05 | 0.86 |
| MTX | Minerals Technologies Inc | 0.55 | 0.95 | 0.7 |
| NEU | NewMarket Corp | 0.15 | 0.6 | 0.55 |
| SCL | Stepan Co | 0.5 | 1.23 | 0.93 |
| VNP.TO | 5N Plus Inc | 0.26 | 0.99 | 0.85 |
| VNTR | Venator Materials PLC | 36.06 | 1.74 | 0.07 |
| Low | High | |
| Unlevered beta | 0.66 | 0.85 |
| Relevered beta | 0.78 | 1.01 |
| Adjusted relevered beta | 0.85 | 1.01 |
GRA'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 GRA:
cost_of_equity (8.10%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (0.85) + 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.