The WACC of Wheeler Real Estate Investment Trust Inc (WHLR) is 12.3%.
| Range | Selected | |
| Cost of equity | 238.00% - 349.40% | 293.70% |
| Tax rate | -% - 0.10% | 0.05% |
| Cost of debt | 5.60% - 15.60% | 10.60% |
| WACC | 7.0% - 17.6% | 12.3% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 50.9 | 61.52 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 238.00% | 349.40% |
| Tax rate | -% | 0.10% |
| Debt/Equity ratio | 171.02 | 171.02 |
| Cost of debt | 5.60% | 15.60% |
| After-tax WACC | 7.0% | 17.6% |
| Selected WACC | 12.3% | |
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 WHLR:
cost_of_equity (293.70%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (50.9) + 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.