RCG WACC - Weighted Average Cost of Capital
The WACC of RENN Fund Inc (RCG) is 4.8%.
| Range | Selected | |
| Cost of equity | 5.2% - 6.7% | 5.95% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 4.5% - 5.2% | 4.8% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.29 | 0.33 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.2% | 6.7% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 4.5% | 5.2% |
| Selected WACC | 4.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| RCG | RENN Fund Inc | 0.89 | 3.55 | 2.15 |
| CAPP | Capstone Financial Group Inc | 0.01 | 0.52 | 0.52 |
| CGRA | Cgrowth Capital Inc | 0.01 | -0.11 | -0.11 |
| ELC.V | Elysee Development Corp | 0.18 | 0.36 | 0.32 |
| EQS | EQUUS Total Return Inc | 3.5 | -0.28 | -0.08 |
| ESGW.V | ESG Global Impact Capital Inc | 0.06 | 1.02 | 0.98 |
| HLTH.CN | Global Care Capital Inc | 0.23 | 0.94 | 0.8 |
| IDEA | Aeon Ventures Inc | 0.42 | -1.16 | -0.89 |
| JAGR | Green Street Capital Corp | 25.66 | 0.07 | 0 |
| PXI.V | Planet Ventures Inc | 0.14 | -0.3 | -0.27 |
| Low | High | |
| Unlevered beta | -0.03 | 0.4 |
| Relevered beta | -0.06 | 0 |
| Adjusted relevered beta | 0.29 | 0.33 |
RCG'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 RCG:
cost_of_equity (5.95%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.29) + 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.