ICHR WACC - Weighted Average Cost of Capital

The WACC of Ichor Holdings Ltd (ICHR) is 10.6%.

The Cost of Equity of Ichor Holdings Ltd (ICHR) is 10.50%.

The Cost of Debt of Ichor Holdings Ltd (ICHR) is 14.40%.

	Range	Selected
Cost of equity	9.30% - 11.70%	10.50%
Tax rate	8.20% - 12.70%	10.45%
Cost of debt	4.90% - 23.90%	14.40%
WACC	9.0% - 12.3%	10.6%

WACC

ICHR WACC calculation

Category	Low	High

Long-term bond rate	3.9%	4.4%
Equity market risk premium	4.6%	5.6%
Adjusted beta	1.17	1.22

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.30%	11.70%

Tax rate	8.20%	12.70%
Debt/Equity ratio	0.07	0.07
Cost of debt	4.90%	23.90%

After-tax WACC	9.0%	12.3%


Selected WACC	10.6%

ICHR'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 ICHR:

cost_of_equity (10.50%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.17) + 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.