The WACC of Ibc Advanced Alloys Corp (IB.V) is 7.9%.
| Range | Selected | |
| Cost of equity | 5.10% - 7.10% | 6.10% |
| Tax rate | 1.40% - 2.10% | 1.75% |
| Cost of debt | 7.00% - 10.90% | 8.95% |
| WACC | 6.3% - 9.5% | 7.9% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.23 | 0.37 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.10% | 7.10% |
| Tax rate | 1.40% | 2.10% |
| Debt/Equity ratio | 2.07 | 2.07 |
| Cost of debt | 7.00% | 10.90% |
| After-tax WACC | 6.3% | 9.5% |
| Selected WACC | 7.9% | |
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 IB.V:
cost_of_equity (6.10%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (0.23) + 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.