REFI
Chicago Atlantic Real Estate Finance Inc
Price:  
13.6 
USD
Volume:  
103,083
United States | Mortgage Real Estate Investment Trusts (REITs)

REFI WACC - Weighted Average Cost of Capital

The WACC of Chicago Atlantic Real Estate Finance Inc (REFI) is 5.8%.

The Cost of Equity of Chicago Atlantic Real Estate Finance Inc (REFI) is 6.6%.
The Cost of Debt of Chicago Atlantic Real Estate Finance Inc (REFI) is 4.9%.

RangeSelected
Cost of equity5.7% - 7.5%6.6%
Tax rate26.2% - 27.0%26.6%
Cost of debt4.9% - 4.9%4.9%
WACC5.1% - 6.5%5.8%
WACC

REFI WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta0.390.47
Additional risk adjustments0.0%0.5%
Cost of equity5.7%7.5%
Tax rate26.2%27.0%
Debt/Equity ratio
0.360.36
Cost of debt4.9%4.9%
After-tax WACC5.1%6.5%
Selected WACC5.8%

REFI'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 REFI:

cost_of_equity (6.60%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.39) + 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.