The WACC of Ecmoho Ltd (MOHO) is 7.5%.
Range | Selected | |
Cost of equity | 5.7% - 8.4% | 7.05% |
Tax rate | 4.4% - 5.4% | 4.9% |
Cost of debt | 7.0% - 9.4% | 8.2% |
WACC | 6.2% - 8.7% | 7.5% |
Category | Low | High |
Long-term bond rate | 3.2% | 3.7% |
Equity market risk premium | 4.2% | 5.2% |
Adjusted beta | 0.59 | 0.82 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 5.7% | 8.4% |
Tax rate | 4.4% | 5.4% |
Debt/Equity ratio | 1.23 | 1.23 |
Cost of debt | 7.0% | 9.4% |
After-tax WACC | 6.2% | 8.7% |
Selected WACC | 7.5% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
MOHO | Ecmoho Ltd | 1.23 | 0.93 | 0.43 |
EATR | Eastern Asteria Inc | 1.53 | -255.52 | -104.03 |
FOOD.TO | Goodfood Market Corp | 4.17 | 1.53 | 0.31 |
HEWA | HealthWarehouse.com Inc | 0.52 | -0.11 | -0.07 |
IMBI | iMedia Brands Inc | 55.57 | 2.14 | 0.04 |
LITB | LightInTheBox Holding Co Ltd | 0.03 | -1.51 | -1.46 |
PTS.TO | Points International Ltd | 0 | 1.62 | 1.62 |
RSTN | RDE Inc | 0.07 | 0.46 | 0.43 |
SECO | Secoo Holding Ltd | 58.33 | -2.46 | -0.04 |
UXIN | Uxin Ltd | 0.3 | 0.61 | 0.47 |
Low | High | |
Unlevered beta | 0.01 | 0.36 |
Relevered beta | 0.39 | 0.73 |
Adjusted relevered beta | 0.59 | 0.82 |
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 MOHO:
cost_of_equity (7.05%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (0.59) + 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.