PARR WACC - Weighted Average Cost of Capital

The WACC of Par Pacific Holdings Inc (PARR) is 12.5%.

The Cost of Equity of Par Pacific Holdings Inc (PARR) is 7.90%.

The Cost of Debt of Par Pacific Holdings Inc (PARR) is 16.10%.

	Range	Selected
Cost of equity	6.40% - 9.40%	7.90%
Tax rate	1.60% - 3.00%	2.30%
Cost of debt	11.30% - 20.90%	16.10%
WACC	9.2% - 15.8%	12.5%

WACC

PARR WACC calculation

Category	Low	High

Long-term bond rate	3.9%	4.4%
Equity market risk premium	4.6%	5.6%
Adjusted beta	0.55	0.81

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.40%	9.40%

Tax rate	1.60%	3.00%
Debt/Equity ratio	1.44	1.44
Cost of debt	11.30%	20.90%

After-tax WACC	9.2%	15.8%


Selected WACC	12.5%

PARR'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 PARR:

cost_of_equity (7.90%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.55) + 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.