BURCA
Burnham Holdings Inc
Price:  
19.70 
USD
Volume:  
1,550.00
United States | Building Products
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BURCA WACC - Weighted Average Cost of Capital

The WACC of Burnham Holdings Inc (BURCA) is 7.7%.

The Cost of Equity of Burnham Holdings Inc (BURCA) is 8.90%.
The Cost of Debt of Burnham Holdings Inc (BURCA) is 5.00%.

Range Selected
Cost of equity 7.10% - 10.70% 8.90%
Tax rate 23.40% - 24.20% 23.80%
Cost of debt 5.00% - 5.00% 5.00%
WACC 6.4% - 9.1% 7.7%
WACC

BURCA WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.71 1.04
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.10% 10.70%
Tax rate 23.40% 24.20%
Debt/Equity ratio 0.3 0.3
Cost of debt 5.00% 5.00%
After-tax WACC 6.4% 9.1%
Selected WACC 7.7%

BURCA's CAPM model and how its cost of Equity is calculated

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 BURCA:

cost_of_equity (8.90%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.71) + 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.