POR
Portland General Electric Co
Price:  
42.57 
USD
Volume:  
972,417.00
United States | Electric Utilities
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POR WACC - Weighted Average Cost of Capital

The WACC of Portland General Electric Co (POR) is 5.9%.

The Cost of Equity of Portland General Electric Co (POR) is 7.45%.
The Cost of Debt of Portland General Electric Co (POR) is 5.05%.

Range Selected
Cost of equity 6.40% - 8.50% 7.45%
Tax rate 9.80% - 12.10% 10.95%
Cost of debt 4.00% - 6.10% 5.05%
WACC 5.0% - 6.9% 5.9%
WACC

POR 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 0.65
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.40% 8.50%
Tax rate 9.80% 12.10%
Debt/Equity ratio 1.03 1.03
Cost of debt 4.00% 6.10%
After-tax WACC 5.0% 6.9%
Selected WACC 5.9%

POR'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 POR:

cost_of_equity (7.45%) = 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.