MHLD WACC - Weighted Average Cost of Capital
The WACC of Maiden Holdings Ltd (MHLD) is 6.6%.
| Range | Selected | |
| Cost of equity | 8.4% - 11.9% | 10.15% |
| Tax rate | 0.4% - 0.5% | 0.45% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.1% - 7.2% | 6.6% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.98 | 1.26 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.4% | 11.9% |
| Tax rate | 0.4% | 0.5% |
| Debt/Equity ratio | 2.13 | 2.13 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.1% | 7.2% |
| Selected WACC | 6.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| MHLD | Maiden Holdings Ltd | 2.13 | 1.24 | 0.4 |
| AMBC | Ambac Financial Group Inc | 0.36 | 1.1 | 0.81 |
| AOREF | American Overseas Group Ltd | 0.74 | 0.12 | 0.07 |
| ESGR | Enstar Group Ltd | 0.37 | 0.16 | 0.12 |
| GLRE | Greenlight Capital Re Ltd | 0.13 | 0.59 | 0.52 |
| GVFG | Gerova Financial Group Ltd | 0.56 | 1 | 0.64 |
| KINS | Kingstone Companies Inc | 0.04 | 1.05 | 1.01 |
| OXBR | Oxbridge Re Holdings Ltd | 0.01 | 1.57 | 1.55 |
| RE | Everest Re Group Ltd | 0.22 | 0.41 | 0.34 |
| RNR | Renaissancere Holdings Ltd | 0.16 | 0.31 | 0.26 |
| Low | High | |
| Unlevered beta | 0.37 | 0.57 |
| Relevered beta | 0.97 | 1.39 |
| Adjusted relevered beta | 0.98 | 1.26 |
MHLD'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 MHLD:
cost_of_equity (10.15%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.98) + 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.