IWSH WACC - Weighted Average Cost of Capital
The WACC of Wright Investors Service Holdings Inc (IWSH) is 8.4%.
| Range | Selected | |
| Cost of equity | 11.0% - 15.3% | 13.15% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 7.4% - 9.5% | 8.4% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.56 | 1.87 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 11.0% | 15.3% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 7.4% | 9.5% |
| Selected WACC | 8.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| IWSH | Wright Investors Service Holdings Inc | 1 | -0.35 | -0.2 |
| AVNI | Arvana Inc | 0 | 0.52 | 0.52 |
| FNDM | Fund.Com Inc | 2.64 | 2.01 | 0.69 |
| HIH.V | Hylands International Holdings Inc | 0.03 | 1.64 | 1.61 |
| LSMG | Lode-Star Mining Inc | 0.04 | -1.07 | -1.04 |
| MUST.H.V | Must Capital Inc | 0.07 | 1.26 | 1.2 |
| PDV.TO | Prime Dividend Corp | 0 | 1.26 | 1.26 |
| PPK.V | Prospect Park Capital Corp | 0.02 | 2 | 1.97 |
| Low | High | |
| Unlevered beta | 0.65 | 1.21 |
| Relevered beta | 1.84 | 2.3 |
| Adjusted relevered beta | 1.56 | 1.87 |
IWSH'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 IWSH:
cost_of_equity (13.15%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.56) + 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.