SB
Safe Bulkers Inc
Price:  
3.86 
USD
Volume:  
1,129,885.00
Monaco | Marine
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SB WACC - Weighted Average Cost of Capital

The WACC of Safe Bulkers Inc (SB) is 6.9%.

The Cost of Equity of Safe Bulkers Inc (SB) is 10.65%.
The Cost of Debt of Safe Bulkers Inc (SB) is 5.20%.

Range Selected
Cost of equity 9.20% - 12.10% 10.65%
Tax rate 26.20% - 27.00% 26.60%
Cost of debt 4.30% - 6.10% 5.20%
WACC 5.9% - 7.9% 6.9%
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 1.16 1.3
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.20% 12.10%
Tax rate 26.20% 27.00%
Debt/Equity ratio 1.24 1.24
Cost of debt 4.30% 6.10%
After-tax WACC 5.9% 7.9%
Selected WACC 6.9%

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 (10.65%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.16) + 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.