FTHM WACC - Weighted Average Cost of Capital
The WACC of Fathom Holdings Inc (FTHM) is 8.4%.
| Range | Selected | |
| Cost of equity | 8.6% - 12.0% | 10.3% |
| Tax rate | 0.5% - 2.2% | 1.35% |
| Cost of debt | 4.0% - 7.0% | 5.5% |
| WACC | 6.8% - 10.0% | 8.4% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.04 | 1.28 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.6% | 12.0% |
| Tax rate | 0.5% | 2.2% |
| Debt/Equity ratio | 0.63 | 0.63 |
| Cost of debt | 4.0% | 7.0% |
| After-tax WACC | 6.8% | 10.0% |
| Selected WACC | 8.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| FTHM | Fathom Holdings Inc | 0.63 | 0.7 | 0.43 |
| AIF.TO | Altus Group Ltd | 0.13 | 0.97 | 0.86 |
| BEKE | Ke Holdings Inc | 0 | 1.03 | 1.03 |
| BRE.TO | Bridgemarq Real Estate Services Inc | 0.65 | 0.85 | 0.52 |
| CIGI.TO | Colliers International Group Inc | 0.25 | 1.31 | 1.05 |
| JLL | Jones Lang LaSalle Inc | 0.19 | 1.05 | 0.89 |
| NMRK | Newmark Group Inc | 0.7 | 1.18 | 0.7 |
| RMAX | Re/Max Holdings Inc | 1.44 | 1.43 | 0.59 |
| SRRE | Sunrise Real Estate Group Inc | 0.11 | -0.13 | -0.11 |
| FOXT.L | Foxtons Group PLC | 0.34 | 1.2 | 0.9 |
| Low | High | |
| Unlevered beta | 0.65 | 0.87 |
| Relevered beta | 1.06 | 1.42 |
| Adjusted relevered beta | 1.04 | 1.28 |
FTHM'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 FTHM:
cost_of_equity (10.30%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.04) + 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.