The WACC of Brim hf (BRIM.IC) is 9.9%.
| Range | Selected | |
| Cost of equity | 10.70% - 12.60% | 11.65% |
| Tax rate | 18.40% - 20.20% | 19.30% |
| Cost of debt | 4.20% - 10.70% | 7.45% |
| WACC | 8.4% - 11.3% | 9.9% |
| Category | Low | High |
| Long-term bond rate | 7.1% | 7.6% |
| Equity market risk premium | 6.3% | 7.3% |
| Adjusted beta | 0.57 | 0.61 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.70% | 12.60% |
| Tax rate | 18.40% | 20.20% |
| Debt/Equity ratio | 0.45 | 0.45 |
| Cost of debt | 4.20% | 10.70% |
| After-tax WACC | 8.4% | 11.3% |
| Selected WACC | 9.9% | |
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 BRIM.IC:
cost_of_equity (11.65%) = risk_free_rate (7.35%) + equity_risk_premium (6.80%) * adjusted_beta (0.57) + 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.