The WACC of Enterprise Diversified Inc (SYTE) is 5.9%.
Range | Selected | |
Cost of equity | 6.7% - 9.4% | 8.05% |
Tax rate | 26.2% - 27.0% | 26.6% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 5.2% - 6.5% | 5.9% |
Category | Low | High |
Long-term bond rate | 4.2% | 4.7% |
Equity market risk premium | 5.0% | 6.0% |
Adjusted beta | 0.51 | 0.71 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 6.7% | 9.4% |
Tax rate | 26.2% | 27.0% |
Debt/Equity ratio | 1 | 1 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 5.2% | 6.5% |
Selected WACC | 5.9% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
SYTE | Enterprise Diversified Inc | 0.96 | 0.88 | 0.52 |
BLR.CN | Blackhawk Growth Corp | 2.01 | -4.96 | -2.01 |
CGRA | Cgrowth Capital Inc | 0.01 | 0.25 | 0.25 |
EQS | EQUUS Total Return Inc | 3.49 | -0.28 | -0.08 |
ESGW.V | ESG Global Impact Capital Inc | 0.06 | 1.02 | 0.98 |
FNR.V | 49 North Resources Inc | 1.84 | 0.3 | 0.13 |
FW.V | Flow Capital Corp | 1.22 | 0.29 | 0.15 |
HLTH.CN | Global Care Capital Inc | 0.23 | 0.94 | 0.8 |
PXI.V | Planet Ventures Inc | 0.14 | -0.3 | -0.27 |
WCCP | Wealthcraft Capital Inc | 1.83 | -19.28 | -8.26 |
Low | High | |
Unlevered beta | 0.04 | 0.19 |
Relevered beta | 0.27 | 0.57 |
Adjusted relevered beta | 0.51 | 0.71 |
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 SYTE:
cost_of_equity (8.05%) = risk_free_rate (4.45%) + equity_risk_premium (5.50%) * adjusted_beta (0.51) + 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.