The WACC of Nate's Food Co (NHMD) is 4.0%.
Range | Selected | |
Cost of equity | 14.4% - 151.5% | 82.95% |
Tax rate | 26.2% - 27.0% | 26.6% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 3.7% - 4.3% | 4.0% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 4.6% | 5.6% |
Adjusted beta | 2.28 | 26.18 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 14.4% | 151.5% |
Tax rate | 26.2% | 27.0% |
Debt/Equity ratio | 245.32 | 245.32 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 3.7% | 4.3% |
Selected WACC | 4.0% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
NHMD | Nate's Food Co | 245.32 | -0.15 | 0 |
BLFR | BlueFire Equipment Corp | 0.38 | 1.39 | 1.09 |
CIRX | CirTran Corp | 98.02 | -1.89 | -0.03 |
FLRE | Flameret Inc | 11.22 | 0.04 | 0 |
IMMG | Immage Biotherapeutics Corp | 0.28 | 0 | 0 |
NUVI | Emo Capital Corp | 0.01 | 1.8 | 1.79 |
RGBP | Regen BioPharma Inc | 0.7 | 0.66 | 0.44 |
RWMI | Regalworks Media Inc | 1.16 | 1.77 | 0.96 |
Low | High | |
Unlevered beta | 0 | 0.54 |
Relevered beta | 2.91 | 38.58 |
Adjusted relevered beta | 2.28 | 26.18 |
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 NHMD:
cost_of_equity (82.95%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (2.28) + 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.