REGI WACC - Weighted Average Cost of Capital
The WACC of Renewable Energy Group Inc (REGI) is 6.1%.
| Range | Selected | |
| Cost of equity | 4.8% - 7.1% | 5.95% |
| Tax rate | 3.5% - 5.7% | 4.6% |
| Cost of debt | 4.0% - 10.5% | 7.25% |
| WACC | 4.6% - 7.6% | 6.1% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 4.2% | 5.2% |
| Adjusted beta | 0.38 | 0.57 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 4.8% | 7.1% |
| Tax rate | 3.5% | 5.7% |
| Debt/Equity ratio | 0.17 | 0.17 |
| Cost of debt | 4.0% | 10.5% |
| After-tax WACC | 4.6% | 7.6% |
| Selected WACC | 6.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| REGI | Renewable Energy Group Inc | 0.17 | 0.58 | 0.5 |
| AMTX | Aemetis Inc | 3.05 | 2.09 | 0.54 |
| BDCO | Blue Dolphin Energy Co | 1.82 | -0.54 | -0.2 |
| CCGY | China Clean Energy Inc | 2138.81 | 38.97 | 0.02 |
| CVI | CVR Energy Inc | 0.67 | 1.47 | 0.9 |
| GELV | Green Energy Live Inc | 3207.69 | -47.22 | -0.02 |
| GERS | Greenshift Corp | 10.15 | 0.49 | 0.05 |
| GPRE | Green Plains Inc | 1.11 | 1.37 | 0.67 |
| VTNR | Vertex Energy Inc | 72.03 | 1.02 | 0.01 |
| Low | High | |
| Unlevered beta | 0.02 | 0.41 |
| Relevered beta | 0.07 | 0.36 |
| Adjusted relevered beta | 0.38 | 0.57 |
REGI'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 REGI:
cost_of_equity (5.95%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (0.38) + 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.