FTHM
Fathom Holdings Inc
Price:  
1.17 
USD
Volume:  
271,795.00
United States | Real Estate Management & Development
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FTHM WACC - Weighted Average Cost of Capital

The WACC of Fathom Holdings Inc (FTHM) is 8.8%.

The Cost of Equity of Fathom Holdings Inc (FTHM) is 10.20%.
The Cost of Debt of Fathom Holdings Inc (FTHM) is 5.50%.

Range Selected
Cost of equity 8.90% - 11.50% 10.20%
Tax rate 0.50% - 2.20% 1.35%
Cost of debt 4.00% - 7.00% 5.50%
WACC 7.4% - 10.1% 8.8%
WACC

FTHM WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.09 1.19
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.90% 11.50%
Tax rate 0.50% 2.20%
Debt/Equity ratio 0.43 0.43
Cost of debt 4.00% 7.00%
After-tax WACC 7.4% 10.1%
Selected WACC 8.8%

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 (10.20%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.09) + 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.