JLMC WACC - Weighted Average Cost of Capital
The WACC of JLM Couture Inc (JLMC) is 6.4%.
| Range | Selected | |
| Cost of equity | 6.0% - 8.1% | 7.05% |
| Tax rate | 31.5% - 34.3% | 32.9% |
| Cost of debt | 7.0% - 7.0% | 7% |
| WACC | 5.7% - 7.1% | 6.4% |
| Category | Low | High |
| Long-term bond rate | 4.2% | 4.7% |
| Equity market risk premium | 5.0% | 6.0% |
| Adjusted beta | 0.37 | 0.48 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.0% | 8.1% |
| Tax rate | 31.5% | 34.3% |
| Debt/Equity ratio | 0.41 | 0.41 |
| Cost of debt | 7.0% | 7.0% |
| After-tax WACC | 5.7% | 7.1% |
| Selected WACC | 6.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| JLMC | JLM Couture Inc | 0.41 | 0.22 | 0.17 |
| DOGZ | Dogness International Corp | 0.05 | -0.43 | -0.41 |
| EVK | Ever-Glory International Group Inc | 15.82 | -0.19 | -0.02 |
| FORD | Forward Industries Inc | 0.07 | -1.63 | -1.56 |
| IFA.TO | iFabric Corp | 0.07 | -0.12 | -0.11 |
| KBSF | KBS Fashion Group Ltd | 0.09 | 1.36 | 1.28 |
| LAKE | Lakeland Industries Inc | 0.13 | 0.93 | 0.85 |
| RYU.V | RYU Apparel Inc | 1.47 | 0.38 | 0.19 |
| TBLT | Toughbuilt Industries Inc | 0.26 | -0.09 | -0.07 |
| UNI.TO | Unisync Corp | 2.19 | 0.04 | 0.01 |
| Low | High | |
| Unlevered beta | -0.04 | 0.08 |
| Relevered beta | 0.06 | 0.22 |
| Adjusted relevered beta | 0.37 | 0.48 |
JLMC'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 JLMC:
cost_of_equity (7.05%) = risk_free_rate (4.45%) + equity_risk_premium (5.50%) * adjusted_beta (0.37) + 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.