The WACC of Reviv3 Procare Co (RVIV) is 7.8%.
| Range | Selected | |
| Cost of equity | 6.50% - 9.20% | 7.85% |
| Tax rate | 26.20% - 27.00% | 26.60% |
| Cost of debt | 4.00% - 4.90% | 4.45% |
| WACC | 6.5% - 9.2% | 7.8% |
| Category | Low | High |
| Long-term bond rate | 4.2% | 4.7% |
| Equity market risk premium | 5.0% | 6.0% |
| Adjusted beta | 0.47 | 0.67 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.50% | 9.20% |
| Tax rate | 26.20% | 27.00% |
| Debt/Equity ratio | 0 | 0 |
| Cost of debt | 4.00% | 4.90% |
| After-tax WACC | 6.5% | 9.2% |
| Selected WACC | 7.8% | |
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 RVIV:
cost_of_equity (7.85%) = risk_free_rate (4.45%) + equity_risk_premium (5.50%) * adjusted_beta (0.47) + 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.