IIIN WACC - Weighted Average Cost of Capital
The WACC of Insteel Industries Inc (IIIN) is 6.1%.
| Range | Selected | |
| Cost of equity | 7.0% - 9.7% | 8.35% |
| Tax rate | 22.5% - 22.7% | 22.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.4% - 6.8% | 6.1% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.68 | 0.86 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.0% | 9.7% |
| Tax rate | 22.5% | 22.7% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.4% | 6.8% |
| Selected WACC | 6.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| IIIN | Insteel Industries Inc | 0.91 | 1.25 | 0.74 |
| AEHL | Antelope Enterprise Holdings Ltd | 0.12 | -0.16 | -0.15 |
| AUVI | Applied UV Inc | 3.79 | 1.2 | 0.31 |
| BURCA | Burnham Holdings Inc | 0.25 | 0.26 | 0.21 |
| CSTE | Caesarstone Ltd | 0.09 | 0.75 | 0.7 |
| CSWI | CSW Industrials Inc | 0.03 | 1.75 | 1.71 |
| IVX.V | Inventronics Ltd | 1.11 | 0.53 | 0.29 |
| JELD | JELD-WEN Holding Inc | 3.8 | 0.64 | 0.16 |
| NX | Quanex Building Products Corp | 0.97 | 0.74 | 0.43 |
| PFB.TO | PFB Corporation | 0.1 | 0.52 | 0.49 |
| PGTI | PGT Innovations Inc | 0.25 | 1.15 | 0.96 |
| Low | High | |
| Unlevered beta | 0.31 | 0.49 |
| Relevered beta | 0.52 | 0.79 |
| Adjusted relevered beta | 0.68 | 0.86 |
IIIN'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 IIIN:
cost_of_equity (8.35%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.68) + 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.