ILPT
Industrial Logistics Properties Trust
Price:  
4.70 
USD
Volume:  
738,734.00
United States | Equity Real Estate Investment Trusts (REITs)
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ILPT WACC - Weighted Average Cost of Capital

The WACC of Industrial Logistics Properties Trust (ILPT) is 15.6%.

The Cost of Equity of Industrial Logistics Properties Trust (ILPT) is 27.15%.
The Cost of Debt of Industrial Logistics Properties Trust (ILPT) is 15.00%.

Range Selected
Cost of equity 12.10% - 42.20% 27.15%
Tax rate 0.10% - 0.20% 0.15%
Cost of debt 9.10% - 20.90% 15.00%
WACC 9.3% - 21.9% 15.6%
WACC

ILPT WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.78 6.67
Additional risk adjustments 0.0% 0.5%
Cost of equity 12.10% 42.20%
Tax rate 0.10% 0.20%
Debt/Equity ratio 18.16 18.16
Cost of debt 9.10% 20.90%
After-tax WACC 9.3% 21.9%
Selected WACC 15.6%

ILPT'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 ILPT:

cost_of_equity (27.15%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.78) + 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.