USDP WACC - Weighted Average Cost of Capital
The WACC of USD Partners LP (USDP) is 13.6%.
| Range | Selected | |
| Cost of equity | 281.1% - 568.4% | 424.75% |
| Tax rate | 3.3% - 6.2% | 4.75% |
| Cost of debt | 4.3% - 23.9% | 14.1% |
| WACC | 4.4% - 22.8% | 13.6% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 60.26 | 100.64 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 281.1% | 568.4% |
| Tax rate | 3.3% | 6.2% |
| Debt/Equity ratio | 1173.87 | 1173.87 |
| Cost of debt | 4.3% | 23.9% |
| After-tax WACC | 4.4% | 22.8% |
| Selected WACC | 13.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| USDP | USD Partners LP | 1173.87 | 0.16 | 0 |
| BKEP | Blueknight Energy Partners LP | 0.51 | 1.56 | 1.05 |
| DLNG | Dynagas LNG Partners LP | 2.4 | 0.23 | 0.07 |
| GASS | StealthGas Inc | 0.43 | 0.67 | 0.48 |
| GPP | Green Plains Partners LP | 0.2 | 0.22 | 0.18 |
| KNOP | Knot Offshore Partners LP | 3.98 | 0.05 | 0.01 |
| NNA | Navios Maritime Acquisition Corp | 18.68 | 1.91 | 0.1 |
| OSG | Overseas Shipholding Group Inc | 0.66 | 0.3 | 0.18 |
| TOPS | Top Ships Inc | 9.44 | 0.8 | 0.08 |
| Low | High | |
| Unlevered beta | 0.08 | 0.16 |
| Relevered beta | 89.45 | 149.72 |
| Adjusted relevered beta | 60.26 | 100.64 |
USDP'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 USDP:
cost_of_equity (424.75%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (60.26) + 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.