Question 1

What is Granite Construction Inc.'s WACC?

Accepted Answer

Granite Construction Inc. (GVA) has a Weighted Average Cost of Capital (WACC) of 7.32%. This is calculated using a Cost of Equity of 8.46% (via CAPM with a beta of 1.00) and a pre-tax Cost of Debt of 3.53%, with an equity weight of 79.99% in the capital structure.

Question 2

Is Granite Construction Inc.'s WACC high or low?

Accepted Answer

Granite Construction Inc.'s WACC of 7.32% is below the typical range of 8-12% for most companies, indicating relatively low cost of capital and lower risk. WACC is used as the discount rate in DCF valuations — a lower WACC results in higher present values of future cash flows.

Question 3

How is Granite Construction Inc.'s WACC calculated?

Accepted Answer

Granite Construction Inc.'s WACC is calculated using the formula: WACC = (E/V × Re) + (D/V × Rd × (1-T)). The Cost of Equity (Re) of 8.46% is derived from the CAPM model using a beta of 1.00. The pre-tax Cost of Debt (Rd) is 3.53%. The capital structure is 79.99% equity and 20.01% debt.

Granite Construction Inc. (GVA) — WACC 分析

WACC 构成

解读

Granite Construction Inc.（GVA）WACC：7.32%

WACC计算器

Granite Construction Inc.（GVA） WACC 解读

GVA 公司分析

GVA DCF 估值

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