The WACC of Item 9 Labs Corp (INLB) is 8.7%.
| Range | Selected | |
| Cost of equity | 5.50% - 18,647.80% | 9,326.65% |
| Tax rate | -% - 0.30% | 0.15% |
| Cost of debt | 7.00% - 10.00% | 8.50% |
| WACC | 7.0% - 10.5% | 8.7% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | -13.45 | 3317.75 |
| Additional risk adjustments | 63.5% | 64.0% |
| Cost of equity | 5.50% | 18,647.80% |
| Tax rate | -% | 0.30% |
| Debt/Equity ratio | 38305.84 | 38305.84 |
| Cost of debt | 7.00% | 10.00% |
| After-tax WACC | 7.0% | 10.5% |
| Selected WACC | 8.7% | |
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 (9,326.65%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (-13.45) + risk_adjustments (63.75%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.