GHMP WACC - Weighted Average Cost of Capital
The WACC of Good Hemp Inc (GHMP) is 5.9%.
| Range | Selected | |
| Cost of equity | 6.4% - 8.6% | 7.5% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.3% - 6.6% | 5.9% |
| Category | Low | High |
| Long-term bond rate | 4.2% | 4.7% |
| Equity market risk premium | 5.0% | 6.0% |
| Adjusted beta | 0.44 | 0.57 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.4% | 8.6% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 0.7 | 0.7 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.3% | 6.6% |
| Selected WACC | 5.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| GHMP | Good Hemp Inc | 0.7 | 0.38 | 0.25 |
| ALKM | Alkame Holdings Inc | 107.56 | 2.84 | 0.04 |
| CCEP | Coca-Cola European Partners PLC | 0.31 | 0.43 | 0.35 |
| COKE | Coca-Cola Consolidated Inc | 0.18 | 0.31 | 0.27 |
| FMBV | Full Motion Beverage Inc | 6.43 | 2.08 | 0.37 |
| HIPH | American Premium Water Corp | 1.16 | -219.54 | -118.68 |
| KDP | Keurig Dr Pepper Inc | 0.36 | 0.15 | 0.12 |
| MOJO | MOJO Organics Inc | 0.01 | 0.44 | 0.44 |
| PEP | PepsiCo Inc | 0.25 | 0 | 0 |
| TNY.CN | Tinley Beverage Company Inc | 0.37 | -0.54 | -0.42 |
| Low | High | |
| Unlevered beta | 0.08 | 0.26 |
| Relevered beta | 0.16 | 0.36 |
| Adjusted relevered beta | 0.44 | 0.57 |
GHMP'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 GHMP:
cost_of_equity (7.50%) = risk_free_rate (4.45%) + equity_risk_premium (5.50%) * adjusted_beta (0.44) + 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.