SBLK WACC - Weighted Average Cost of Capital
The WACC of Star Bulk Carriers Corp (SBLK) is 8.2%.
| Range | Selected | |
| Cost of equity | 8.6% - 10.9% | 9.75% |
| Tax rate | 0.0% - 0.1% | 0.05% |
| Cost of debt | 4.7% - 6.1% | 5.4% |
| WACC | 7.2% - 9.1% | 8.2% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.04 | 1.09 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.6% | 10.9% |
| Tax rate | 0.0% | 0.1% |
| Debt/Equity ratio | 0.59 | 0.59 |
| Cost of debt | 4.7% | 6.1% |
| After-tax WACC | 7.2% | 9.1% |
| Selected WACC | 8.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| SBLK | Star Bulk Carriers Corp | 0.59 | 1.13 | 0.71 |
| ALC.TO | Algoma Central Corp | 0.63 | 0.58 | 0.36 |
| CKH | SEACOR Holdings Inc | 0.36 | 0.97 | 0.71 |
| CMRE | Costamare Inc | 1.81 | 0.11 | 0.04 |
| DAC | Danaos Corp | 0.44 | 0.8 | 0.56 |
| EGLE | Eagle Bulk Shipping Inc | 0.61 | 1.09 | 0.68 |
| ESEA | Euroseas Ltd | 0.6 | 1.03 | 0.65 |
| GNK | Genco Shipping & Trading Ltd | 0.13 | 1.16 | 1.03 |
| GOGL | Golden Ocean Group Ltd | 0.82 | 1.61 | 0.88 |
| NETI | Eneti Inc | 0.15 | 0.98 | 0.85 |
| Low | High | |
| Unlevered beta | 0.66 | 0.71 |
| Relevered beta | 1.06 | 1.13 |
| Adjusted relevered beta | 1.04 | 1.09 |
SBLK'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 SBLK:
cost_of_equity (9.75%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.04) + 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.