JVA WACC - Weighted Average Cost of Capital
The WACC of Coffee Holding Co Inc (JVA) is 6.0%.
| Range | Selected | |
| Cost of equity | 7.0% - 10.6% | 8.8% |
| Tax rate | 21.7% - 24.6% | 23.15% |
| Cost of debt | 4.1% - 4.5% | 4.3% |
| WACC | 5.1% - 7.0% | 6.0% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.68 | 1.02 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.0% | 10.6% |
| Tax rate | 21.7% | 24.6% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 4.1% | 4.5% |
| After-tax WACC | 5.1% | 7.0% |
| Selected WACC | 6.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| JVA | Coffee Holding Co Inc | 0.12 | 0.66 | 0.6 |
| AMNF | Armanino Foods Of Distinction Inc | 0.01 | 0.1 | 0.1 |
| ANPFF | Anpulo Food Inc | 0.84 | 0.93 | 0.57 |
| BRFH | Barfresh Food Group Inc | 0.02 | 0.86 | 0.85 |
| BSFC | Blue Star Foods Corp | 0.77 | 1.76 | 1.11 |
| ELAMF | Elamex SA de CV | 0.46 | 0.08 | 0.06 |
| LUCC | Luca Inc | 0.17 | 1.1 | 0.97 |
| PLIN | China Xiangtai Food Co Ltd | 0.02 | 1.1 | 1.08 |
| RMCF | Rocky Mountain Chocolate Factory Inc (Delaware) | 0.13 | 0.45 | 0.41 |
| SWP.TO | Swiss Water Decaffeinated Coffee Inc | 4.02 | 0.52 | 0.13 |
| TOFB | Tofutti Brands Inc | 0.01 | 0.61 | 0.61 |
| Low | High | |
| Unlevered beta | 0.57 | 0.61 |
| Relevered beta | 0.52 | 1.03 |
| Adjusted relevered beta | 0.68 | 1.02 |
JVA'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 JVA:
cost_of_equity (8.80%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.68) + 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.