SVIN WACC - Weighted Average Cost of Capital
The WACC of Scheid Vineyards Inc (SVIN) is 5.7%.
| Range | Selected | |
| Cost of equity | 9.5% - 12.6% | 11.05% |
| Tax rate | 34.3% - 39.6% | 36.95% |
| Cost of debt | 4.0% - 7.0% | 5.5% |
| WACC | 4.6% - 6.7% | 5.7% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 4.2% | 5.2% |
| Adjusted beta | 1.48 | 1.61 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.5% | 12.6% |
| Tax rate | 34.3% | 39.6% |
| Debt/Equity ratio | 2.42 | 2.42 |
| Cost of debt | 4.0% | 7.0% |
| After-tax WACC | 4.6% | 6.7% |
| Selected WACC | 5.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| SVIN | Scheid Vineyards Inc | 2.42 | 0.28 | 0.11 |
| ALCO | Alico Inc | 0.37 | 0.29 | 0.23 |
| IGP.V | Imperial Ginseng Products Ltd | 0.96 | 1.32 | 0.83 |
| INP.V | Input Capital Corp | 0.18 | 1.02 | 0.92 |
| LMNR | Limoneira Co | 0.14 | 0.68 | 0.62 |
| SANW | S&W Seed Co | 4.54 | 1.42 | 0.37 |
| STEV | Stevia Corp | 0.35 | -0.19 | -0.15 |
| YEWB | Yew Bio-Pharm Group Inc | 868.46 | 1.82 | 0 |
| Low | High | |
| Unlevered beta | 0.21 | 0.42 |
| Relevered beta | 1.72 | 1.91 |
| Adjusted relevered beta | 1.48 | 1.61 |
SVIN'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 SVIN:
cost_of_equity (11.05%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (1.48) + 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.