ICON
Iconix Brand Group Inc
Price:  
1.96 
USD
Volume:  
73,828.00
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 9.6%.

The Cost of Equity of Iconix Brand Group Inc (ICON) is 39.30%.
The Cost of Debt of Iconix Brand Group Inc (ICON) is 9.05%.

Range Selected
Cost of equity 29.50% - 49.10% 39.30%
Tax rate 17.80% - 21.30% 19.55%
Cost of debt 5.50% - 12.60% 9.05%
WACC 6.4% - 12.9% 9.6%
WACC

ICON WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 4.2% 5.2%
Adjusted beta 6.21 8.58
Additional risk adjustments 0.0% 0.5%
Cost of equity 29.50% 49.10%
Tax rate 17.80% 21.30%
Debt/Equity ratio 12.37 12.37
Cost of debt 5.50% 12.60%
After-tax WACC 6.4% 12.9%
Selected WACC 9.6%

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 (39.30%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (6.21) + 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.