SITC WACC - Weighted Average Cost of Capital
The WACC of Site Centers Corp (SITC) is 7.4%.
| Range | Selected | |
| Cost of equity | 7.7% - 9.9% | 8.8% |
| Tax rate | 0.8% - 1.0% | 0.9% |
| Cost of debt | 4.0% - 4.8% | 4.4% |
| WACC | 6.5% - 8.3% | 7.4% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.82 | 0.9 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.7% | 9.9% |
| Tax rate | 0.8% | 1.0% |
| Debt/Equity ratio | 0.44 | 0.44 |
| Cost of debt | 4.0% | 4.8% |
| After-tax WACC | 6.5% | 8.3% |
| Selected WACC | 7.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| SITC | Site Centers Corp | 0.44 | 0.58 | 0.41 |
| FCR.UN.TO | First Capital Real Estate Investment Trust | 1.08 | 1.06 | 0.51 |
| IARE | Inventrust Properties Corp | 0.44 | 0.92 | 0.64 |
| MAC | Macerich Co | 1.22 | 1.14 | 0.52 |
| RPAI | Retail Properties of America Inc | 0.62 | 1.74 | 1.08 |
| SRC | Spirit Realty Capital Inc | 0.6 | 1.57 | 0.98 |
| SRU.UN.TO | SmartCentres Real Estate Investment Trust | 1.37 | 0.97 | 0.41 |
| UBA | Urstadt Biddle Properties Inc | 0.4 | 0.79 | 0.56 |
| UE | Urban Edge Properties | 0.68 | 0.69 | 0.41 |
| WRI | Weingarten Realty Investors | 0.46 | 1.61 | 1.1 |
| Low | High | |
| Unlevered beta | 0.51 | 0.6 |
| Relevered beta | 0.73 | 0.85 |
| Adjusted relevered beta | 0.82 | 0.9 |
SITC'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 SITC:
cost_of_equity (8.80%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.82) + 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.