FLWS WACC - Weighted Average Cost of Capital
The WACC of 1-800-Flowers.Com Inc (FLWS) is 7.5%.
| Range | Selected | |
| Cost of equity | 7.4% - 9.5% | 8.45% |
| Tax rate | 4.7% - 11.1% | 7.9% |
| Cost of debt | 6.1% - 7.0% | 6.55% |
| WACC | 6.8% - 8.3% | 7.5% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.77 | 0.83 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.4% | 9.5% |
| Tax rate | 4.7% | 11.1% |
| Debt/Equity ratio | 0.63 | 0.63 |
| Cost of debt | 6.1% | 7.0% |
| After-tax WACC | 6.8% | 8.3% |
| Selected WACC | 7.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| FLWS | 1-800-Flowers.Com Inc | 0.63 | 1.51 | 0.94 |
| DLTH | Duluth Holdings Inc | 0.86 | 0.66 | 0.36 |
| FOOD.TO | Goodfood Market Corp | 4.33 | 1.5 | 0.29 |
| GRPN | Groupon Inc | 0.24 | 1.75 | 1.43 |
| LE | Lands End Inc | 0.81 | 0.94 | 0.53 |
| LEJU | Leju Holdings Ltd | 0.05 | 1.56 | 1.49 |
| MOHO | Ecmoho Ltd | 1.23 | 0.93 | 0.43 |
| VIPS | Vipshop Holdings Ltd | 0.04 | 0.43 | 0.41 |
| WNW | Wunong Net Technology Co Ltd | 1.07 | 0.82 | 0.41 |
| Low | High | |
| Unlevered beta | 0.41 | 0.51 |
| Relevered beta | 0.66 | 0.75 |
| Adjusted relevered beta | 0.77 | 0.83 |
FLWS'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 FLWS:
cost_of_equity (8.45%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.77) + 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.