EIK.IC WACC - Weighted Average Cost of Capital
The WACC of Eik fasteignafelag hf (EIK.IC) is 8.8%.
| Range | Selected | |
| Cost of equity | 9.5% - 12.0% | 10.75% |
| Tax rate | 20.0% - 20.1% | 20.05% |
| Cost of debt | 4.0% - 15.6% | 9.8% |
| WACC | 5.4% - 12.3% | 8.8% |
| Category | Low | High |
| Long-term bond rate | 7.1% | 7.6% |
| Equity market risk premium | 6.3% | 7.3% |
| Adjusted beta | 0.38 | 0.54 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.5% | 12.0% |
| Tax rate | 20.0% | 20.1% |
| Debt/Equity ratio | 1.92 | 1.92 |
| Cost of debt | 4.0% | 15.6% |
| After-tax WACC | 5.4% | 12.3% |
| Selected WACC | 8.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| EIK.IC | Eik fasteignafelag hf | 1.92 | 0.92 | 0.36 |
| GALIM.PA | Galimmo SCA | 0.43 | -0.18 | -0.14 |
| GR1T.L | Grit Real Estate Income Group Ltd | 10.04 | -0.33 | -0.04 |
| NREN.SW | Novavest Real Estate AG | 1.44 | -0.1 | -0.05 |
| PHN.WA | Polski Holding Nieruchomosci SA | 3.66 | 0.44 | 0.11 |
| PRIMOF.CO | Prime Office A/S | 3.1 | 0.16 | 0.05 |
| REGINN.IC | Reginn hf | 2.6 | 0.62 | 0.2 |
| REITIR.IC | Reitir fasteignafelag hf | 1.43 | 0.67 | 0.31 |
| STEF B.ST | Stendorren Fastigheter AB | 1.53 | 0.02 | 0.01 |
| VARN.SW | Varia US Properties AG | 3.38 | 0.5 | 0.13 |
| Low | High | |
| Unlevered beta | 0.03 | 0.12 |
| Relevered beta | 0.07 | 0.31 |
| Adjusted relevered beta | 0.38 | 0.54 |
EIK.IC'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 EIK.IC:
cost_of_equity (10.75%) = risk_free_rate (7.35%) + equity_risk_premium (6.80%) * adjusted_beta (0.38) + 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.