LADR
Ladder Capital Corp
Price:  
11.47 
USD
Volume:  
663,574.00
United States | Mortgage Real Estate Investment Trusts (REITs)
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LADR WACC - Weighted Average Cost of Capital

The WACC of Ladder Capital Corp (LADR) is 11.5%.

The Cost of Equity of Ladder Capital Corp (LADR) is 6.40%.
The Cost of Debt of Ladder Capital Corp (LADR) is 14.35%.

Range Selected
Cost of equity 5.50% - 7.30% 6.40%
Tax rate 3.00% - 3.50% 3.25%
Cost of debt 4.80% - 23.90% 14.35%
WACC 4.9% - 18.0% 11.5%
WACC

LADR WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.36 0.44
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.50% 7.30%
Tax rate 3.00% 3.50%
Debt/Equity ratio 2.12 2.12
Cost of debt 4.80% 23.90%
After-tax WACC 4.9% 18.0%
Selected WACC 11.5%

LADR'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 LADR:

cost_of_equity (6.40%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.36) + 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.