The WACC of Marimed Inc (MRMD) is 11.9%.
Range | Selected | |
Cost of equity | 9.4% - 16.0% | 12.7% |
Tax rate | 26.2% - 27.0% | 26.6% |
Cost of debt | 10.7% - 20.9% | 15.8% |
WACC | 8.3% - 15.4% | 11.9% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 4.6% | 5.6% |
Adjusted beta | 1.21 | 1.99 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 9.4% | 16.0% |
Tax rate | 26.2% | 27.0% |
Debt/Equity ratio | 2.98 | 2.98 |
Cost of debt | 10.7% | 20.9% |
After-tax WACC | 8.3% | 15.4% |
Selected WACC | 11.9% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
MRMD | Marimed Inc | 2.98 | 1 | 0.31 |
ACTG | Acacia Research Corp | 0.31 | 0.87 | 0.71 |
BLGV.CN | Belgravia Hartford Capital Inc | 0.01 | 0.92 | 0.91 |
EFX | Equifax Inc | 0.15 | 1.18 | 1.06 |
GRPX | GreenPlex Services Inc | 0.19 | 1.01 | 0.89 |
HQI | Hirequest Inc | 0.05 | 0.45 | 0.44 |
KERN | Akerna Corp | 4.5 | -0.26 | -0.06 |
PCMC | Public Company Management Corp | 0.07 | -1.06 | -1.01 |
WSCO | Wall Street Media Co Inc | 0 | 0.38 | 0.37 |
FLX.L | Falanx Group Ltd | 0.88 | 2.01 | 1.22 |
Low | High | |
Unlevered beta | 0.41 | 0.78 |
Relevered beta | 1.31 | 2.48 |
Adjusted relevered beta | 1.21 | 1.99 |
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 MRMD:
cost_of_equity (12.70%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.21) + 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.