The WACC of Xalles Holdings Inc (XALL) is 3.7%.
Range | Selected | |
Cost of equity | 3.0% - 8.0% | 5.5% |
Tax rate | 26.2% - 27.0% | 26.6% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 3.7% - 3.7% | 3.7% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 4.6% | 5.6% |
Adjusted beta | -1.05 | -0.16 |
Additional risk adjustments | 4.0% | 4.5% |
Cost of equity | 3.0% | 8.0% |
Tax rate | 26.2% | 27.0% |
Debt/Equity ratio | 56.15 | 56.15 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 3.7% | 3.7% |
Selected WACC | 3.7% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
XALL | Xalles Holdings Inc | 56.15 | -1.32 | -0.03 |
ASAV | ASI Aviation Inc | 0.35 | 1.08 | 0.86 |
BCND | Beacon Redevelopment Industrial Corp | 1.09 | 0 | 0 |
BGII | BGI Inc | 0.12 | -0.15 | -0.14 |
FGNV | Forge Innovation Development Corp | 1.07 | -0.05 | -0.03 |
GIPR | Generation Income Properties Inc | 7.98 | 0.65 | 0.1 |
IDVV | International Endeavors Corp | 0.62 | -1.58 | -1.08 |
PTCO | PetroGas Co | 0.54 | -0.86 | -0.62 |
RLP.V | Realia Properties Inc | 8.85 | 0.15 | 0.02 |
RPP.V | Regent Pacific Properties Inc | 8.5 | -0.54 | -0.08 |
Low | High | |
Unlevered beta | -0.05 | -0.02 |
Relevered beta | -2.06 | -0.73 |
Adjusted relevered beta | -1.05 | -0.16 |
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 XALL:
cost_of_equity (5.50%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (-1.05) + risk_adjustments (4.25%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.