MDRR WACC - Weighted Average Cost of Capital
The WACC of Medalist Diversified Reit Inc (MDRR) is 9.6%.
| Range | Selected | |
| Cost of equity | 6.0% - 7.8% | 6.9% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 5.1% - 23.9% | 14.5% |
| WACC | 4.4% - 14.7% | 9.6% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.46 | 0.53 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.0% | 7.8% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 2.57 | 2.57 |
| Cost of debt | 5.1% | 23.9% |
| After-tax WACC | 4.4% | 14.7% |
| Selected WACC | 9.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| MDRR | Medalist Diversified Reit Inc | 2.57 | 0.26 | 0.09 |
| BELP | Belpointe Reit Inc | 0.3 | 0.93 | 0.76 |
| FCD.UN.V | Firm Capital Property Trust | 1.1 | 1.25 | 0.69 |
| FREVS | First Real Estate Investment Trust of New Jersey | 1.03 | -0.02 | -0.01 |
| FRO.UN.V | Fronsac REIT | 0.83 | 0.25 | 0.16 |
| GNL | Global Net Lease Inc | 2.44 | 0.16 | 0.06 |
| MR.UN.TO | Melcor Real Estate Investment Trust | 5.56 | 0.62 | 0.12 |
| MRT.UN.TO | Morguard Real Estate Investment Trust | 3.37 | 0.22 | 0.06 |
| PINE | Alpine Income Property Trust Inc | 1.44 | -0.05 | -0.03 |
| SQFT | Presidio Property Trust Inc | 10.97 | 0.64 | 0.07 |
| Low | High | |
| Unlevered beta | 0.07 | 0.1 |
| Relevered beta | 0.19 | 0.3 |
| Adjusted relevered beta | 0.46 | 0.53 |
MDRR'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 MDRR:
cost_of_equity (6.90%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.46) + 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.