IHC
Independence Holding Co
Price:  
57.01 
USD
Volume:  
39,147.00
United States | Insurance
Valuation
Overview
Financials
Forecast
Compare
Historical Price
SolvencyDividends
Transactions
People

IHC WACC - Weighted Average Cost of Capital

The WACC of Independence Holding Co (IHC) is 5.8%.

The Cost of Equity of Independence Holding Co (IHC) is 8.50%.
The Cost of Debt of Independence Holding Co (IHC) is 5.00%.

Range Selected
Cost of equity 7.30% - 9.70% 8.50%
Tax rate 33.40% - 41.60% 37.50%
Cost of debt 5.00% - 5.00% 5.00%
WACC 5.3% - 6.3% 5.8%
WACC

IHC WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 4.2% 5.2%
Adjusted beta 0.96 1.05
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.30% 9.70%
Tax rate 33.40% 41.60%
Debt/Equity ratio 1 1
Cost of debt 5.00% 5.00%
After-tax WACC 5.3% 6.3%
Selected WACC 5.8%

IHC'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 IHC:

cost_of_equity (8.50%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (0.96) + 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.