The WACC of Item 9 Labs Corp (INLB) is 8.6%.
| Range | Selected | |
| Cost of equity | 5.40% - 10,294.60% | 5,150.00% |
| Tax rate | -% - 0.30% | 0.15% |
| Cost of debt | 7.00% - 10.00% | 8.50% |
| WACC | 7.0% - 10.3% | 8.6% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | -24.98 | 1816.64 |
| Additional risk adjustments | 116.5% | 117.0% |
| Cost of equity | 5.40% | 10,294.60% |
| Tax rate | -% | 0.30% |
| Debt/Equity ratio | 38316.43 | 38316.43 |
| Cost of debt | 7.00% | 10.00% |
| After-tax WACC | 7.0% | 10.3% |
| Selected WACC | 8.6% | |
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 INLB:
cost_of_equity (5,150.00%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (-24.98) + risk_adjustments (116.75%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.