BXMT WACC - Weighted Average Cost of Capital
The WACC of Blackstone Mortgage Trust Inc (BXMT) is 6.0%.
| Range | Selected | |
| Cost of equity | 6.0% - 8.4% | 7.2% |
| Tax rate | 0.8% - 1.2% | 1% |
| Cost of debt | 4.6% - 7.0% | 5.8% |
| WACC | 4.8% - 7.2% | 6.0% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.47 | 0.63 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.0% | 8.4% |
| Tax rate | 0.8% | 1.2% |
| Debt/Equity ratio | 4.67 | 4.67 |
| Cost of debt | 4.6% | 7.0% |
| After-tax WACC | 4.8% | 7.2% |
| Selected WACC | 6.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| BXMT | Blackstone Mortgage Trust Inc | 4.67 | 0.67 | 0.12 |
| ACR | Acres Commercial Realty Corp | 9.74 | 0.13 | 0.01 |
| ARI | Apollo Commercial Real Estate Finance Inc | 4.63 | 0.57 | 0.1 |
| CIM | Chimera Investment Corp | 8.81 | 0.65 | 0.07 |
| ECRO | ECC Capital Corp | 282.52 | -0.59 | 0 |
| HASI | Hannon Armstrong Sustainable Infrastructure Capital Inc | 1.28 | 0.11 | 0.05 |
| JERT | JER Investors Trust Inc | 106974 | 0.82 | 0 |
| MITT | AG Mortgage Investment Trust Inc | 29.36 | 0.45 | 0.02 |
| NRZ | New Residential Investment Corp | 4.31 | 1.67 | 0.32 |
| STWD | Starwood Property Trust Inc | 2.53 | 0.55 | 0.16 |
| Low | High | |
| Unlevered beta | 0.04 | 0.08 |
| Relevered beta | 0.21 | 0.45 |
| Adjusted relevered beta | 0.47 | 0.63 |
BXMT'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 BXMT:
cost_of_equity (7.20%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.47) + 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.