IBAL WACC - Weighted Average Cost of Capital
The WACC of International Baler Corp (IBAL) is 4.5%.
| Range | Selected | |
| Cost of equity | 4.7% - 6.9% | 5.8% |
| Tax rate | 34.1% - 37.7% | 35.9% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 4.0% - 5.0% | 4.5% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 4.2% | 5.2% |
| Adjusted beta | 0.36 | 0.52 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 4.7% | 6.9% |
| Tax rate | 34.1% | 37.7% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 4.0% | 5.0% |
| Selected WACC | 4.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| IBAL | International Baler Corp | 0.97 | 0.39 | 0.24 |
| AAPJ | Aap 101 Inc | 0.11 | -2.85 | -2.67 |
| AGSO | AgriSolar Solutions Inc | 0.05 | 0.32 | 0.31 |
| CFRI | Conforce International Inc | 20.12 | 115.53 | 8.48 |
| EVTN | Enviro Technologies US Inc | 0.1 | 0.68 | 0.64 |
| KGET | Calipharms Inc | 17.06 | -15.39 | -1.31 |
| MMTC | Micro Imaging Technology Inc | 351.19 | -0.4 | 0 |
| OML.V | Omni Lite Industries Canada Inc | 0.44 | 0.68 | 0.53 |
| SEII | Sharing Economy International Inc | 183.77 | -27.8 | -0.24 |
| Low | High | |
| Unlevered beta | 0.05 | 0.3 |
| Relevered beta | 0.04 | 0.28 |
| Adjusted relevered beta | 0.36 | 0.52 |
IBAL'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 IBAL:
cost_of_equity (5.80%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (0.36) + 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.