UIHC
United Insurance Holdings Corp
Price:  
7.93 
USD
Volume:  
740,026.00
United States | Insurance
Valuation
Overview
Financials
Forecast
Compare
Historical Price
SolvencyDividends
Transactions
People

UIHC WACC - Weighted Average Cost of Capital

The WACC of United Insurance Holdings Corp (UIHC) is 7.0%.

The Cost of Equity of United Insurance Holdings Corp (UIHC) is 8.45%.
The Cost of Debt of United Insurance Holdings Corp (UIHC) is 5.00%.

Range Selected
Cost of equity 7.50% - 9.40% 8.45%
Tax rate 23.30% - 27.90% 25.60%
Cost of debt 5.00% - 5.00% 5.00%
WACC 6.4% - 7.6% 7.0%
WACC

UIHC WACC calculation

Category Low High
Long-term bond rate 4.2% 4.7%
Equity market risk premium 5.0% 6.0%
Adjusted beta 0.66 0.7
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.50% 9.40%
Tax rate 23.30% 27.90%
Debt/Equity ratio 0.44 0.44
Cost of debt 5.00% 5.00%
After-tax WACC 6.4% 7.6%
Selected WACC 7.0%

UIHC'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 UIHC:

cost_of_equity (8.45%) = risk_free_rate (4.45%) + equity_risk_premium (5.50%) * adjusted_beta (0.66) + 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.