IQE.L WACC - Weighted Average Cost of Capital
The WACC of IQE PLC (IQE.L) is 6.9%.
| Range | Selected | |
| Cost of equity | 7.0% - 9.7% | 8.35% |
| Tax rate | 2.9% - 12.4% | 7.65% |
| Cost of debt | 4.1% - 7.0% | 5.55% |
| WACC | 5.7% - 8.2% | 6.9% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.5 | 0.67 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.0% | 9.7% |
| Tax rate | 2.9% | 12.4% |
| Debt/Equity ratio | 0.77 | 0.77 |
| Cost of debt | 4.1% | 7.0% |
| After-tax WACC | 5.7% | 8.2% |
| Selected WACC | 6.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| IQE.L | IQE PLC | 0.77 | 1.57 | 0.9 |
| ALRIB.PA | Riber SA | 0.11 | 1.51 | 1.36 |
| EEMS.MI | EEMS Italia SpA | 0.14 | 0.26 | 0.23 |
| ELES.MI | Eles Semiconductor Equipment SpA | 0.44 | 0.55 | 0.39 |
| M5Z.DE | Manz AG | 5.41 | 0.52 | 0.08 |
| MBTN.SW | Meyer Burger Technology AG | 8.3 | 0.05 | 0.01 |
| OSA.MI | Osai Automation System SpA | 6.56 | 1.33 | 0.18 |
| RECSI.OL | REC Silicon ASA | 4.49 | 0.12 | 0.02 |
| SIS.DE | First Sensor AG | 0.01 | -0.13 | -0.12 |
| ASYS | Amtech Systems Inc | 0 | 0.56 | 0.56 |
| Low | High | |
| Unlevered beta | 0.14 | 0.3 |
| Relevered beta | 0.25 | 0.51 |
| Adjusted relevered beta | 0.5 | 0.67 |
IQE.L'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 IQE.L:
cost_of_equity (8.35%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.5) + 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.