CIM
Chimera Investment Corp
Price:  
13.99 
USD
Volume:  
608,061.00
United States | Mortgage Real Estate Investment Trusts (REITs)
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CIM WACC - Weighted Average Cost of Capital

The WACC of Chimera Investment Corp (CIM) is 13.3%.

The Cost of Equity of Chimera Investment Corp (CIM) is 8.10%.
The Cost of Debt of Chimera Investment Corp (CIM) is 13.95%.

Range Selected
Cost of equity 6.20% - 10.00% 8.10%
Tax rate 0.10% - 0.10% 0.10%
Cost of debt 4.00% - 23.90% 13.95%
WACC 4.2% - 22.4% 13.3%
WACC

CIM WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.51 0.93
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.20% 10.00%
Tax rate 0.10% 0.10%
Debt/Equity ratio 8.8 8.8
Cost of debt 4.00% 23.90%
After-tax WACC 4.2% 22.4%
Selected WACC 13.3%

CIM'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 CIM:

cost_of_equity (8.10%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.51) + 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.