FF
FutureFuel Corp
Price:  
3.75 
USD
Volume:  
219,392.00
United States | Chemicals
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FF WACC - Weighted Average Cost of Capital

The WACC of FutureFuel Corp (FF) is 7.9%.

The Cost of Equity of FutureFuel Corp (FF) is 11.55%.
The Cost of Debt of FutureFuel Corp (FF) is 5.00%.

Range Selected
Cost of equity 9.90% - 13.20% 11.55%
Tax rate 8.50% - 25.20% 16.85%
Cost of debt 5.00% - 5.00% 5.00%
WACC 7.3% - 8.5% 7.9%
WACC

FF WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.32 1.49
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.90% 13.20%
Tax rate 8.50% 25.20%
Debt/Equity ratio 1 1
Cost of debt 5.00% 5.00%
After-tax WACC 7.3% 8.5%
Selected WACC 7.9%

FF'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 FF:

cost_of_equity (11.55%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.32) + 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.