FXBY WACC - Weighted Average Cost of Capital
The WACC of Foxby Corp (FXBY) is 7.4%.
| Range | Selected | |
| Cost of equity | 6.2% - 9.7% | 7.95% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.9% - 8.9% | 7.4% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.51 | 0.86 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.2% | 9.7% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 0.16 | 0.16 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.9% | 8.9% |
| Selected WACC | 7.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| FXBY | Foxby Corp | 0.16 | 3.55 | 3.18 |
| HIH.V | Hylands International Holdings Inc | 0.03 | 1.64 | 1.61 |
| LITT.V | Roadman Investments Corp | 0.06 | 0.57 | 0.55 |
| LSMG | Lode-Star Mining Inc | 0.04 | -1.07 | -1.04 |
| MILC | Millennium Investment & Acquisition Company Inc | 0.98 | 0.32 | 0.19 |
| PDV.TO | Prime Dividend Corp | 0 | 1.26 | 1.26 |
| PPK.V | Prospect Park Capital Corp | 0.02 | 2 | 1.97 |
| SRSG | Spirits Time International Inc | 1.32 | 0.33 | 0.17 |
| WI.V | Western Investment Company of Canada Ltd | 0.07 | 0.79 | 0.75 |
| Low | High | |
| Unlevered beta | 0.59 | 1.16 |
| Relevered beta | 0.27 | 0.79 |
| Adjusted relevered beta | 0.51 | 0.86 |
FXBY'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 FXBY:
cost_of_equity (7.95%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.51) + 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.