IRIG WACC - Weighted Average Cost of Capital

The WACC of Integrated Drilling Equipment Holdings Corp (IRIG) is 9.9%.

The Cost of Equity of Integrated Drilling Equipment Holdings Corp (IRIG) is 10,522,002.60%.

The Cost of Debt of Integrated Drilling Equipment Holdings Corp (IRIG) is 10.20%.

	Range	Selected
Cost of equity	6,492,339.60% - 14,551,665.60%	10,522,002.60%
Tax rate	26.20% - 27.00%	26.60%
Cost of debt	9.10% - 11.30%	10.20%
WACC	8.2% - 11.6%	9.9%

WACC

IRIG WACC calculation

Category	Low	High

Long-term bond rate	3.9%	4.4%
Equity market risk premium	4.6%	5.6%
Adjusted beta	1.41137733e+06	2.59851085e+06

Additional risk adjustments	0.0%	0.5%
Cost of equity	6,492,339.60%	14,551,665.60%

Tax rate	26.20%	27.00%
Debt/Equity ratio	4.37488889e+06	4.37488889e+06
Cost of debt	9.10%	11.30%

After-tax WACC	8.2%	11.6%


Selected WACC	9.9%

IRIG'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 IRIG:

cost_of_equity (10,522,002.60%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.41137733e+06) + 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.