IDEA WACC - Weighted Average Cost of Capital
The WACC of Aeon Ventures Inc (IDEA) is 5.7%.
| Range | Selected | |
| Cost of equity | 5.2% - 6.7% | 5.95% |
| Tax rate | 0.3% - 2.0% | 1.15% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.1% - 6.2% | 5.7% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.29 | 0.33 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.2% | 6.7% |
| Tax rate | 0.3% | 2.0% |
| Debt/Equity ratio | 0.42 | 0.42 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.1% | 6.2% |
| Selected WACC | 5.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| IDEA | Aeon Ventures Inc | 0.42 | -1.16 | -0.82 |
| CAPP | Capstone Financial Group Inc | 0.01 | 0.52 | 0.52 |
| CGRA | Cgrowth Capital Inc | 0.01 | -0.11 | -0.11 |
| HPIL | HPIL Holding | 15.83 | 0 | 0 |
| JAGR | Green Street Capital Corp | 25.66 | 0.07 | 0 |
| PXI.V | Planet Ventures Inc | 0.14 | -0.3 | -0.26 |
| SCGX | GTEK Industries Inc | 0 | -0.6 | -0.6 |
| VTNA | Vetanova Inc | 11.61 | 0 | 0 |
| Low | High | |
| Unlevered beta | -0.14 | 0 |
| Relevered beta | -0.06 | 0 |
| Adjusted relevered beta | 0.29 | 0.33 |
IDEA'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 IDEA:
cost_of_equity (5.95%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.29) + 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.