FRZT WACC - Weighted Average Cost of Capital
The WACC of Freeze Tag Inc (FRZT) is 5.9%.
| Range | Selected | |
| Cost of equity | 5.3% - 7.5% | 6.4% |
| Tax rate | 0.4% - 0.6% | 0.5% |
| Cost of debt | 4.0% - 7.0% | 5.5% |
| WACC | 4.7% - 7.2% | 5.9% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.31 | 0.46 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.3% | 7.5% |
| Tax rate | 0.4% | 0.6% |
| Debt/Equity ratio | 0.94 | 0.94 |
| Cost of debt | 4.0% | 7.0% |
| After-tax WACC | 4.7% | 7.2% |
| Selected WACC | 5.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| FRZT | Freeze Tag Inc | 0.94 | -0.23 | -0.12 |
| AHIX | ALUF Holdings Inc | 0.04 | -1.21 | -1.17 |
| BABL | Buildablock Corp. | 0 | -0.03 | -0.03 |
| BXV.CN | Bexar Ventures Inc | 0.06 | 0.95 | 0.9 |
| IENT | iEntertainment Network Inc | 0.1 | -0.34 | -0.31 |
| NUGN | NuGene International Inc | 3.75 | 1.22 | 0.26 |
| PEGX | Pegasus Companies Inc | 0.06 | -0.03 | -0.03 |
| SRCO | Sparta Commercial Services Inc | 1.29 | 0.67 | 0.29 |
| UPYY | Upay Inc | 0 | 1.85 | 1.84 |
| Low | High | |
| Unlevered beta | -0.03 | 0.2 |
| Relevered beta | -0.03 | 0.19 |
| Adjusted relevered beta | 0.31 | 0.46 |
FRZT'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 FRZT:
cost_of_equity (6.40%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.31) + 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.