SB
Safe Bulkers Inc
Price:  
3.42 
USD
Volume:  
266,085.00
Monaco | Marine
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SB WACC - Weighted Average Cost of Capital

The WACC of Safe Bulkers Inc (SB) is 6.5%.

The Cost of Equity of Safe Bulkers Inc (SB) is 10.80%.
The Cost of Debt of Safe Bulkers Inc (SB) is 4.95%.

Range Selected
Cost of equity 9.10% - 12.50% 10.80%
Tax rate 26.20% - 27.00% 26.60%
Cost of debt 4.30% - 5.60% 4.95%
WACC 5.6% - 7.5% 6.5%
WACC

SB 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 1.37
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.10% 12.50%
Tax rate 26.20% 27.00%
Debt/Equity ratio 1.48 1.48
Cost of debt 4.30% 5.60%
After-tax WACC 5.6% 7.5%
Selected WACC 6.5%

SB'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 SB:

cost_of_equity (10.80%) = 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.