JAMN WACC - Weighted Average Cost of Capital
The WACC of Jammin Java Corp (JAMN) is 5.2%.
| Range | Selected | |
| Cost of equity | 6.2% - 8.7% | 7.45% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 4.7% - 5.7% | 5.2% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.5 | 0.69 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.2% | 8.7% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 1.5 | 1.5 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 4.7% | 5.7% |
| Selected WACC | 5.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| JAMN | Jammin Java Corp | 1.5 | 112.92 | 53.92 |
| ASRE | Astra Energy Inc | 1.03 | 1.65 | 0.94 |
| CUBV | CUBA Beverage Co | 0.17 | -0.09 | -0.08 |
| CVGW | Calavo Growers Inc | 0.01 | 0.71 | 0.7 |
| DLC.V | DLC Holdings Corp | 0.91 | -0.86 | -0.52 |
| GB.V | Ginger Beef Corp | 0.38 | 0.19 | 0.15 |
| GLG.TO | Glg Life Tech Corp | 33.27 | -0.49 | -0.02 |
| LW | Lamb Weston Holdings Inc | 0.53 | 0.12 | 0.09 |
| PARF | Paradise Inc | 0.01 | 0.42 | 0.42 |
| SEB | Seaboard Corp | 0.57 | 0.21 | 0.15 |
| TOFB | Tofutti Brands Inc | 0.01 | 0.61 | 0.61 |
| Low | High | |
| Unlevered beta | 0.15 | 0.42 |
| Relevered beta | 0.25 | 0.54 |
| Adjusted relevered beta | 0.5 | 0.69 |
JAMN'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 JAMN:
cost_of_equity (7.45%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.5) + 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.