PDNLB WACC - Weighted Average Cost of Capital

The WACC of Presidential Realty Corp (PDNLB) is 9.4%.

The Cost of Equity of Presidential Realty Corp (PDNLB) is 14,369.60%.

The Cost of Debt of Presidential Realty Corp (PDNLB) is 10.95%.

	Range	Selected
Cost of equity	10,260.70% - 18,478.50%	14,369.60%
Tax rate	26.20% - 27.00%	26.60%
Cost of debt	6.30% - 15.60%	10.95%
WACC	5.7% - 13.2%	9.4%

WACC

PDNLB WACC calculation

Category	Low	High

Long-term bond rate	3.9%	4.4%
Equity market risk premium	4.6%	5.6%
Adjusted beta	2229.74	3298.87

Additional risk adjustments	0.0%	0.5%
Cost of equity	10,260.70%	18,478.50%

Tax rate	26.20%	27.00%
Debt/Equity ratio	10507.25	10507.25
Cost of debt	6.30%	15.60%

After-tax WACC	5.7%	13.2%


Selected WACC	9.4%

PDNLB'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 PDNLB:

cost_of_equity (14,369.60%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (2229.74) + 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.