SQBG WACC - Weighted Average Cost of Capital

The WACC of Sequential Brands Group Inc (SQBG) is 11.6%.

The Cost of Equity of Sequential Brands Group Inc (SQBG) is 72.55%.

The Cost of Debt of Sequential Brands Group Inc (SQBG) is 12.75%.

	Range	Selected
Cost of equity	43.30% - 101.80%	72.55%
Tax rate	16.10% - 21.30%	18.70%
Cost of debt	9.20% - 16.30%	12.75%
WACC	8.5% - 14.8%	11.6%

WACC

SQBG WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	4.2%	5.2%
Adjusted beta	9.47	18.62

Additional risk adjustments	0.0%	0.5%
Cost of equity	43.30%	101.80%

Tax rate	16.10%	21.30%
Debt/Equity ratio	43.76	43.76
Cost of debt	9.20%	16.30%

After-tax WACC	8.5%	14.8%


Selected WACC	11.6%

SQBG'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 SQBG:

cost_of_equity (72.55%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (9.47) + 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.