FVTI WACC - Weighted Average Cost of Capital
The WACC of Fortune Valley Treasures Inc (FVTI) is 7.2%.
| Range | Selected | |
| Cost of equity | 17.8% - 37.2% | 27.5% |
| Tax rate | 6.4% - 9.3% | 7.85% |
| Cost of debt | 6.9% - 7.0% | 6.95% |
| WACC | 6.9% - 7.5% | 7.2% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 3.04 | 5.77 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 17.8% | 37.2% |
| Tax rate | 6.4% | 9.3% |
| Debt/Equity ratio | 26.74 | 26.74 |
| Cost of debt | 6.9% | 7.0% |
| After-tax WACC | 6.9% | 7.5% |
| Selected WACC | 7.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| FVTI | Fortune Valley Treasures Inc | 26.74 | -9.64 | -0.38 |
| POR.MI | Portobello SpA | 6.43 | 0.78 | 0.11 |
| SFD.WA | SFD SA | 0.2 | 0.23 | 0.19 |
| ZZ B.ST | Zinzino AB | 0.01 | 0.75 | 0.74 |
| BEER.V | Hill Street Beverage Company Inc | 0.22 | 1.58 | 1.32 |
| BSHI | Boss Holdings Inc | 0 | 0.25 | 0.25 |
| EDUC | Educational Development Corp | 3.11 | 0.15 | 0.04 |
| GIBX | GIB Capital Group Inc | 98523.34 | -0.42 | 0 |
| GPC | Genuine Parts Co | 0.24 | 0.51 | 0.42 |
| RTTO | Rito Group Corp | 1.09 | 0.91 | 0.46 |
| Low | High | |
| Unlevered beta | 0.16 | 0.32 |
| Relevered beta | 4.04 | 8.12 |
| Adjusted relevered beta | 3.04 | 5.77 |
FVTI'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 FVTI:
cost_of_equity (27.50%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (3.04) + 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.