The WACC of Future Fintech Group Inc (FTFT) is 6.5%.
Range | Selected | |
Cost of equity | 5.5% - 7.7% | 6.6% |
Tax rate | 0.0% - 0.4% | 0.2% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 5.5% - 7.5% | 6.5% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 4.6% | 5.6% |
Adjusted beta | 0.36 | 0.5 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 5.5% | 7.7% |
Tax rate | 0.0% | 0.4% |
Debt/Equity ratio | 0.09 | 0.09 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 5.5% | 7.5% |
Selected WACC | 6.5% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
FTFT | Future Fintech Group Inc | 0.09 | 0.53 | 0.49 |
BZUN | Baozun Inc | 1.57 | 0.5 | 0.2 |
MARK | Remark Holdings Inc | 6.88 | 0.28 | 0.04 |
PBX.V | PowerBand Solutions Inc | 0.06 | -1.75 | -1.64 |
SHRG | Sharing Services Global Corp | 5.77 | 0.3 | 0.04 |
VTEQ | Veriteq Corp | 125.5 | 1.01 | 0.01 |
WLTR.V | GOLO Mobile Inc | 0.09 | 0.99 | 0.9 |
WNW | Wunong Net Technology Co Ltd | 1.08 | 0.77 | 0.37 |
002280.SZ | Hangzhou Liaison Interactive Information Technology Co Ltd | 5.19 | 1.82 | 0.29 |
Low | High | |
Unlevered beta | 0.07 | 0.27 |
Relevered beta | 0.04 | 0.25 |
Adjusted relevered beta | 0.36 | 0.5 |
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 FTFT:
cost_of_equity (6.60%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.36) + 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.