SAFE
Safehold Inc
Price:  
15.02 
USD
Volume:  
255,311.00
United States | Equity Real Estate Investment Trusts (REITs)
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SAFE WACC - Weighted Average Cost of Capital

The WACC of Safehold Inc (SAFE) is 7.3%.

The Cost of Equity of Safehold Inc (SAFE) is 11.00%.
The Cost of Debt of Safehold Inc (SAFE) is 6.55%.

Range Selected
Cost of equity 9.10% - 12.90% 11.00%
Tax rate 0.40% - 1.60% 1.00%
Cost of debt 4.00% - 9.10% 6.55%
WACC 5.0% - 9.7% 7.3%
WACC

SAFE WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.14 1.43
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.10% 12.90%
Tax rate 0.40% 1.60%
Debt/Equity ratio 4.16 4.16
Cost of debt 4.00% 9.10%
After-tax WACC 5.0% 9.7%
Selected WACC 7.3%

SAFE'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 SAFE:

cost_of_equity (11.00%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.14) + 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.