QTT WACC - Weighted Average Cost of Capital
The WACC of Qutoutiao Inc (QTT) is 7.4%.
| Range | Selected | |
| Cost of equity | 6.4% - 11.6% | 9% |
| Tax rate | 0.1% - 0.1% | 0.1% |
| Cost of debt | 7.0% - 7.0% | 7% |
| WACC | 6.9% - 7.9% | 7.4% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 4.2% | 5.2% |
| Adjusted beta | 0.77 | 1.42 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.4% | 11.6% |
| Tax rate | 0.1% | 0.1% |
| Debt/Equity ratio | 4.22 | 4.22 |
| Cost of debt | 7.0% | 7.0% |
| After-tax WACC | 6.9% | 7.9% |
| Selected WACC | 7.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| QTT | Qutoutiao Inc | 4.22 | 3.55 | 0.68 |
| LOV | Spark Networks SE | 20.48 | 0.45 | 0.02 |
| MDF.TO | mdf Commerce Inc | 0.04 | 0.31 | 0.3 |
| MFON | Mobivity Holdings Corp | 0.43 | -0.03 | -0.02 |
| MVEN | Themaven Inc | 0.57 | 0.21 | 0.13 |
| SFUN | Fang Holdings Ltd | 28.89 | 1.01 | 0.03 |
| WDDD | Worlds Inc | 1.96 | -2.33 | -0.79 |
| YIPI | Yippy Inc | 47.92 | -119.68 | -2.45 |
| YNDX | Yandex NV | 0.28 | 1.61 | 1.26 |
| 6100.HK | Tongdao Liepin Group | 0.08 | 2.43 | 2.25 |
| Low | High | |
| Unlevered beta | 0.03 | 0.2 |
| Relevered beta | 0.66 | 1.63 |
| Adjusted relevered beta | 0.77 | 1.42 |
QTT'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 QTT:
cost_of_equity (9.00%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (0.77) + 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.