SRG
Seritage Growth Properties
Price:  
2.95 
USD
Volume:  
99,545.00
United States | Equity Real Estate Investment Trusts (REITs)
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SRG WACC - Weighted Average Cost of Capital

The WACC of Seritage Growth Properties (SRG) is 7.1%.

The Cost of Equity of Seritage Growth Properties (SRG) is 7.65%.
The Cost of Debt of Seritage Growth Properties (SRG) is 6.70%.

Range Selected
Cost of equity 6.30% - 9.00% 7.65%
Tax rate 0.30% - 0.50% 0.40%
Cost of debt 6.40% - 7.00% 6.70%
WACC 6.3% - 7.8% 7.1%
WACC

SRG WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.53 0.75
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.30% 9.00%
Tax rate 0.30% 0.50%
Debt/Equity ratio 1.41 1.41
Cost of debt 6.40% 7.00%
After-tax WACC 6.3% 7.8%
Selected WACC 7.1%

SRG'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 SRG:

cost_of_equity (7.65%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.53) + 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.