STRR
Star Equity Holdings Inc
Price:  
USD
Volume:  
16,797
United States | Health Care Providers & Services

STRR WACC - Weighted Average Cost of Capital

The WACC of Star Equity Holdings Inc (STRR) is 7.6%.

The Cost of Equity of Star Equity Holdings Inc (STRR) is 6.6%.
The Cost of Debt of Star Equity Holdings Inc (STRR) is 8.4%.

RangeSelected
Cost of equity5.4% - 7.8%6.6%
Tax rate2.3% - 3.1%2.7%
Cost of debt7.0% - 9.8%8.4%
WACC6.3% - 8.9%7.6%
WACC

STRR WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta0.330.53
Additional risk adjustments0.0%0.5%
Cost of equity5.4%7.8%
Tax rate2.3%3.1%
Debt/Equity ratio
1.771.77
Cost of debt7.0%9.8%
After-tax WACC6.3%8.9%
Selected WACC7.6%

STRR'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 STRR:

cost_of_equity (6.60%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.33) + 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.