The WACC of Talon International Inc (TALN) is 48.6%.
Range | Selected | |
Cost of equity | 6.0% - 12.3% | 9.15% |
Tax rate | 26.2% - 27.0% | 26.6% |
Cost of debt | 4.5% - 228.3% | 116.4% |
WACC | 4.6% - 92.6% | 48.6% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 4.6% | 5.6% |
Adjusted beta | 0.46 | 1.33 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 6.0% | 12.3% |
Tax rate | 26.2% | 27.0% |
Debt/Equity ratio | 1.08 | 1.08 |
Cost of debt | 4.5% | 228.3% |
After-tax WACC | 4.6% | 92.6% |
Selected WACC | 48.6% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
TALN | Talon International Inc | 1.08 | -0.29 | -0.16 |
FORD | Forward Industries Inc | 0.09 | -1.87 | -1.76 |
GFTX | Global Fiber Technologies Inc | 0.04 | 0.94 | 0.91 |
JLMC | JLM Couture Inc | 0.41 | 0.22 | 0.17 |
KBSF | KBS Fashion Group Ltd | 0.09 | 1.36 | 1.28 |
LAKE | Lakeland Industries Inc | 0.14 | 0.93 | 0.84 |
MENE.V | Mene Inc | 0.02 | 1.5 | 1.47 |
SGC | Superior Group of Companies Inc | 0.52 | 1.14 | 0.83 |
TBLT | Toughbuilt Industries Inc | 0.16 | -0.06 | -0.05 |
UNI.TO | Unisync Corp | 2.29 | 0.03 | 0.01 |
Low | High | |
Unlevered beta | 0.11 | 0.83 |
Relevered beta | 0.19 | 1.49 |
Adjusted relevered beta | 0.46 | 1.33 |
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 TALN:
cost_of_equity (9.15%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.46) + 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.