The WACC of Weingarten Realty Investors (WRI) is 8.1%.
| Range | Selected | |
| Cost of equity | 8.00% - 10.50% | 9.25% |
| Tax rate | 0.40% - 0.50% | 0.45% |
| Cost of debt | 4.00% - 7.20% | 5.60% |
| WACC | 6.7% - 9.4% | 8.1% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 4.2% | 5.2% |
| Adjusted beta | 1.14 | 1.21 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.00% | 10.50% |
| Tax rate | 0.40% | 0.50% |
| Debt/Equity ratio | 0.46 | 0.46 |
| Cost of debt | 4.00% | 7.20% |
| After-tax WACC | 6.7% | 9.4% |
| Selected WACC | 8.1% | |
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 WRI:
cost_of_equity (9.25%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (1.14) + 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.