GROV
Grove Collaborative Holdings Inc
Price:  
1.38 
USD
Volume:  
50,059.00
United States | Internet & Direct Marketing Retail
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GROV WACC - Weighted Average Cost of Capital

The WACC of Grove Collaborative Holdings Inc (GROV) is 8.0%.

The Cost of Equity of Grove Collaborative Holdings Inc (GROV) is 7.55%.
The Cost of Debt of Grove Collaborative Holdings Inc (GROV) is 11.30%.

Range Selected
Cost of equity 6.70% - 8.40% 7.55%
Tax rate 0.10% - 0.10% 0.10%
Cost of debt 7.00% - 15.60% 11.30%
WACC 6.8% - 9.3% 8.0%
WACC

GROV WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.62 0.64
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.70% 8.40%
Tax rate 0.10% 0.10%
Debt/Equity ratio 0.13 0.13
Cost of debt 7.00% 15.60%
After-tax WACC 6.8% 9.3%
Selected WACC 8.0%

GROV'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 GROV:

cost_of_equity (7.55%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.62) + 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.