The WACC of Ideanomics Inc (IDEX) is 38.8%.
| Range | Selected | |
| Cost of equity | 328.70% - 881.00% | 604.85% |
| Tax rate | 1.70% - 2.60% | 2.15% |
| Cost of debt | 7.00% - 69.80% | 38.40% |
| WACC | 7.7% - 70.0% | 38.8% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 70.62 | 156.45 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 328.70% | 881.00% |
| Tax rate | 1.70% | 2.60% |
| Debt/Equity ratio | 406.14 | 406.14 |
| Cost of debt | 7.00% | 69.80% |
| After-tax WACC | 7.7% | 70.0% |
| Selected WACC | 38.8% | |
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 IDEX:
cost_of_equity (604.85%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (70.62) + 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.