ICON
Iconix Brand Group Inc
Price:  
2.16 
USD
Volume:  
461,339.00
United States | Textiles, Apparel & Luxury Goods
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ICON WACC - Weighted Average Cost of Capital

The WACC of Iconix Brand Group Inc (ICON) is 15.5%.

The Cost of Equity of Iconix Brand Group Inc (ICON) is 6.80%.
The Cost of Debt of Iconix Brand Group Inc (ICON) is 23.90%.

Range Selected
Cost of equity 5.30% - 8.30% 6.80%
Tax rate 26.20% - 27.00% 26.60%
Cost of debt 23.90% - 23.90% 23.90%
WACC 15.3% - 15.7% 15.5%
WACC

ICON WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.2 0.52
Additional risk adjustments 0.5% 1.0%
Cost of equity 5.30% 8.30%
Tax rate 26.20% 27.00%
Debt/Equity ratio 4.36 4.36
Cost of debt 23.90% 23.90%
After-tax WACC 15.3% 15.7%
Selected WACC 15.5%

ICON'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 ICON:

cost_of_equity (6.80%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.2) + risk_adjustments (0.75%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.