REITIR.IC WACC - Weighted Average Cost of Capital
The WACC of Reitir fasteignafelag hf (REITIR.IC) is 8.2%.
| Range | Selected | |
| Cost of equity | 9.2% - 10.9% | 10.05% |
| Tax rate | 24.1% - 27.6% | 25.85% |
| Cost of debt | 4.0% - 15.6% | 9.8% |
| WACC | 5.3% - 11.2% | 8.2% |
| Category | Low | High |
| Long-term bond rate | 7.1% | 7.6% |
| Equity market risk premium | 6.3% | 7.3% |
| Adjusted beta | 0.34 | 0.39 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.2% | 10.9% |
| Tax rate | 24.1% | 27.6% |
| Debt/Equity ratio | 1.73 | 1.73 |
| Cost of debt | 4.0% | 15.6% |
| After-tax WACC | 5.3% | 11.2% |
| Selected WACC | 8.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| REITIR.IC | Reitir fasteignafelag hf | 1.73 | 0.73 | 0.32 |
| ATEB.BR | Atenor SA | 4.27 | 0.07 | 0.02 |
| FREN.SW | Fundamenta Real Estate AG | 1.21 | 0.01 | 0 |
| GERHSP.CO | German High Street Properties A/S | 0.74 | 0.11 | 0.07 |
| GR1T.L | Grit Real Estate Income Group Ltd | 9.9 | -0.3 | -0.04 |
| NREN.SW | Novavest Real Estate AG | 1.44 | -0.07 | -0.03 |
| ORIA.PA | Fiducial Real Estate SA | 0.41 | -0.01 | -0.01 |
| REGINN.IC | Reginn hf | 2.6 | 0.62 | 0.21 |
| STEF B.ST | Stendorren Fastigheter AB | 1.38 | 0.01 | 0 |
| VARN.SW | Varia US Properties AG | 3.08 | 0.36 | 0.11 |
| Low | High | |
| Unlevered beta | 0 | 0.04 |
| Relevered beta | 0.01 | 0.09 |
| Adjusted relevered beta | 0.34 | 0.39 |
REITIR.IC'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 REITIR.IC:
cost_of_equity (10.05%) = risk_free_rate (7.35%) + equity_risk_premium (6.80%) * adjusted_beta (0.34) + 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.