ROIC
Retail Opportunity Investments Corp
Price:  
17.49 
USD
Volume:  
840,125.00
United States | Equity Real Estate Investment Trusts (REITs)
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ROIC WACC - Weighted Average Cost of Capital

The WACC of Retail Opportunity Investments Corp (ROIC) is 7.0%.

The Cost of Equity of Retail Opportunity Investments Corp (ROIC) is 8.30%.
The Cost of Debt of Retail Opportunity Investments Corp (ROIC) is 6.65%.

Range Selected
Cost of equity 7.30% - 9.30% 8.30%
Tax rate 26.20% - 27.00% 26.60%
Cost of debt 4.20% - 9.10% 6.65%
WACC 5.7% - 8.3% 7.0%
WACC

ROIC WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.74 0.79
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.30% 9.30%
Tax rate 26.20% 27.00%
Debt/Equity ratio 0.62 0.62
Cost of debt 4.20% 9.10%
After-tax WACC 5.7% 8.3%
Selected WACC 7.0%

ROIC'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 ROIC:

cost_of_equity (8.30%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.74) + 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.