REGI
Renewable Energy Group Inc
Price:  
61.5 
USD
Volume:  
2,343,380
United States | Oil, Gas & Consumable Fuels

REGI WACC - Weighted Average Cost of Capital

The WACC of Renewable Energy Group Inc (REGI) is 6.1%.

The Cost of Equity of Renewable Energy Group Inc (REGI) is 5.95%.
The Cost of Debt of Renewable Energy Group Inc (REGI) is 7.25%.

RangeSelected
Cost of equity4.8% - 7.1%5.95%
Tax rate3.5% - 5.7%4.6%
Cost of debt4.0% - 10.5%7.25%
WACC4.6% - 7.6%6.1%
WACC

REGI WACC calculation

CategoryLowHigh
Long-term bond rate3.2%3.7%
Equity market risk premium4.2%5.2%
Adjusted beta0.380.57
Additional risk adjustments0.0%0.5%
Cost of equity4.8%7.1%
Tax rate3.5%5.7%
Debt/Equity ratio
0.170.17
Cost of debt4.0%10.5%
After-tax WACC4.6%7.6%
Selected WACC6.1%

REGI WACC - Detailed calculations of Beta

LowHigh
Unlevered beta0.020.41
Relevered beta0.070.36
Adjusted relevered beta0.380.57

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.