PJT WACC - Weighted Average Cost of Capital
The WACC of PJT Partners Inc (PJT) is 5.1%.
| Range | Selected | |
| Cost of equity | 5.3% - 6.7% | 6% |
| Tax rate | 14.0% - 15.8% | 14.9% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 4.8% - 5.5% | 5.1% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.3 | 0.33 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.3% | 6.7% |
| Tax rate | 14.0% | 15.8% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 4.8% | 5.5% |
| Selected WACC | 5.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| PJT | PJT Partners Inc | 0.81 | 1.22 | 0.72 |
| ARM.CN | Armada Mercantile Ltd | 0 | -2.01 | -2.01 |
| BEGI | Blackstar Enterprise Group Inc | 0.38 | -0.36 | -0.27 |
| COIN.V | Coin Hodl Inc | 0.01 | -0.06 | -0.06 |
| DIGAF | Digatrade Financial Corp | 72.6 | 0 | 0 |
| GBC.CN | Greenbank Capital Inc | 2.62 | 0.35 | 0.11 |
| IGEX | Indo Global Exchange(s) Pte Ltd | 0.06 | 0.36 | 0.34 |
| LGHL | Lion Group Holding Ltd | 1.2 | -0.3 | -0.15 |
| MNC.V | Magnetic North Acquisition Corp | 3.06 | 1.54 | 0.43 |
| WSFL | Woodstock Holdings Inc | 3380.65 | -0.91 | 0 |
| Low | High | |
| Unlevered beta | -0.02 | 0.04 |
| Relevered beta | -0.04 | 0 |
| Adjusted relevered beta | 0.3 | 0.33 |
PJT'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 PJT:
cost_of_equity (6.00%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.3) + 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.