The WACC of Viad Corp (VVI) is 6.0%.
Range | Selected | |
Cost of equity | 5.2% - 7.1% | 6.15% |
Tax rate | 17.7% - 27.6% | 22.65% |
Cost of debt | 7.0% - 7.6% | 7.3% |
WACC | 5.4% - 6.6% | 6.0% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 4.6% | 5.6% |
Adjusted beta | 0.29 | 0.4 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 5.2% | 7.1% |
Tax rate | 17.7% | 27.6% |
Debt/Equity ratio | 0.5 | 0.5 |
Cost of debt | 7.0% | 7.6% |
After-tax WACC | 5.4% | 6.6% |
Selected WACC | 6.0% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
VVI | Viad Corp | 0.5 | 1.26 | 0.92 |
CGRW | Cannagrow Holdings Inc | 1.29 | 1.96 | 1.01 |
EWK.V | Earthworks Industries Inc | 0.86 | -0.18 | -0.11 |
GDI.TO | GDI Integrated Facility Services Inc | 0.46 | 0.43 | 0.33 |
ITNM | International Monetary Systems Ltd | 0.68 | 0.95 | 0.63 |
PFMT | Performant Financial Corp | 0.02 | -0.4 | -0.39 |
TEXC | Texcom Inc | 22.58 | -1.66 | -0.09 |
UAV.CN | Global UAV Technologies Ltd | 0.06 | -1.48 | -1.42 |
CFS.WA | Centrum Finansowe SA | 0.27 | -0.1 | -0.09 |
Low | High | |
Unlevered beta | -0.09 | 0.24 |
Relevered beta | -0.06 | 0.1 |
Adjusted relevered beta | 0.29 | 0.4 |
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 Viad:
cost_of_equity (6.15%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.29) + 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.