SIOFF.OL WACC - Weighted Average Cost of Capital
The WACC of Siem Offshore Inc (SIOFF.OL) is 8.5%.
| Range | Selected | |
| Cost of equity | 8.9% - 13.9% | 11.4% |
| Tax rate | 1.0% - 3.3% | 2.15% |
| Cost of debt | 4.0% - 5.7% | 4.85% |
| WACC | 6.8% - 10.3% | 8.5% |
| Category | Low | High |
| Long-term bond rate | 3.5% | 4.0% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 1.05 | 1.53 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.9% | 13.9% |
| Tax rate | 1.0% | 3.3% |
| Debt/Equity ratio | 0.77 | 0.77 |
| Cost of debt | 4.0% | 5.7% |
| After-tax WACC | 6.8% | 10.3% |
| Selected WACC | 8.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| SIOFF.OL | Siem Offshore Inc | 0.77 | 0.65 | 0.37 |
| AKSO.OL | Aker Solutions ASA | 0.19 | 1.09 | 0.92 |
| AQUA.OL | Aqualisbraemar Loc ASA | 0.13 | 1.65 | 1.47 |
| BORR.OL | Borr Drilling Ltd | 1.82 | 1.54 | 0.55 |
| FUR.AS | Fugro NV | 0.3 | 0.77 | 0.59 |
| OCY.OL | Ocean Yield ASA | 2.17 | 1.6 | 0.51 |
| SBMO.AS | SBM Offshore NV | 1.89 | 0.89 | 0.31 |
| SUBC.OL | Subsea 7 SA | 0.2 | 1.38 | 1.15 |
| NEX | Nextier Oilfield Solutions Inc | 0.17 | 1.35 | 1.15 |
| SCL.TO | Shawcor Ltd | 0.21 | 1.12 | 0.92 |
| Low | High | |
| Unlevered beta | 0.58 | 0.92 |
| Relevered beta | 1.07 | 1.79 |
| Adjusted relevered beta | 1.05 | 1.53 |
SIOFF.OL'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 SIOFF.OL:
cost_of_equity (11.40%) = risk_free_rate (3.75%) + equity_risk_premium (5.60%) * adjusted_beta (1.05) + 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.