STLY WACC - Weighted Average Cost of Capital
The WACC of HG Holdings Inc (STLY) is 6.2%.
| Range | Selected | |
| Cost of equity | 5.4% - 9.6% | 7.5% |
| Tax rate | 2.2% - 4.2% | 3.2% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.1% - 7.2% | 6.2% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.32 | 0.84 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.4% | 9.6% |
| Tax rate | 2.2% | 4.2% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.1% | 7.2% |
| Selected WACC | 6.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| STLY | HG Holdings Inc | 1.14 | -0.43 | -0.21 |
| ACRL | Atacama Resources International Inc | 0.25 | 0.82 | 0.66 |
| DRNK | Noho Inc | 0.32 | 1.28 | 0.97 |
| FPVD | Force Protection Video Equipment Corp | 0 | 0.95 | 0.95 |
| IDGC | IDGlobal Corp | 30.14 | -0.43 | -0.01 |
| IPSI | Innovative Payment Solutions Inc | 57.21 | -0.97 | -0.02 |
| IRNS | Ironstone Group Inc | 909.43 | 1.61 | 0 |
| LBI.V | Lions Bay Capital Inc | 0.13 | -1.32 | -1.17 |
| MHE | Blackrock Massachusetts Tax-Exempt Trust | 0.66 | 0.34 | 0.21 |
| MRBL.CN | Marble Financial Inc | 0.64 | -0.56 | -0.35 |
| NCPL | Netcapital Inc | 0.58 | 1.22 | 0.78 |
| Low | High | |
| Unlevered beta | -0.01 | 0.21 |
| Relevered beta | -0.01 | 0.76 |
| Adjusted relevered beta | 0.32 | 0.84 |
STLY'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 STLY:
cost_of_equity (7.50%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.32) + 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.