FREVS
First Real Estate Investment Trust of New Jersey
Price:  
16.95 
USD
Volume:  
120.00
United States | Equity Real Estate Investment Trusts (REITs)
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FREVS WACC - Weighted Average Cost of Capital

The WACC of First Real Estate Investment Trust of New Jersey (FREVS) is 8.3%.

The Cost of Equity of First Real Estate Investment Trust of New Jersey (FREVS) is 9.40%.
The Cost of Debt of First Real Estate Investment Trust of New Jersey (FREVS) is 9.80%.

Range Selected
Cost of equity 7.90% - 10.90% 9.40%
Tax rate 26.20% - 27.00% 26.60%
Cost of debt 4.00% - 15.60% 9.80%
WACC 5.4% - 11.2% 8.3%
WACC

FREVS WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.88 1.08
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.90% 10.90%
Tax rate 26.20% 27.00%
Debt/Equity ratio 1.01 1.01
Cost of debt 4.00% 15.60%
After-tax WACC 5.4% 11.2%
Selected WACC 8.3%

FREVS'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 FREVS:

cost_of_equity (9.40%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.88) + 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.