SPCE
Virgin Galactic Holdings Inc
Price:  
2.89 
USD
Volume:  
2,633,356.00
United States | Aerospace & Defense
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SPCE WACC - Weighted Average Cost of Capital

The WACC of Virgin Galactic Holdings Inc (SPCE) is 8.8%.

The Cost of Equity of Virgin Galactic Holdings Inc (SPCE) is 15.10%.
The Cost of Debt of Virgin Galactic Holdings Inc (SPCE) is 7.00%.

Range Selected
Cost of equity 9.60% - 20.60% 15.10%
Tax rate -% - -% -%
Cost of debt 7.00% - 7.00% 7.00%
WACC 7.6% - 10.0% 8.8%
WACC

SPCE WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.25 2.81
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.60% 20.60%
Tax rate -% -%
Debt/Equity ratio 3.56 3.56
Cost of debt 7.00% 7.00%
After-tax WACC 7.6% 10.0%
Selected WACC 8.8%

SPCE'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 SPCE:

cost_of_equity (15.10%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.25) + 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.