The WACC of Box Ships Inc (TEUFF) is 5.2%.
Range | Selected | |
Cost of equity | 5.4% - 7.1% | 6.25% |
Tax rate | 26.2% - 27.0% | 26.6% |
Cost of debt | 4.0% - 7.0% | 5.5% |
WACC | 4.2% - 6.1% | 5.2% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 4.6% | 5.6% |
Adjusted beta | 0.34 | 0.4 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 5.4% | 7.1% |
Tax rate | 26.2% | 27.0% |
Debt/Equity ratio | 1 | 1 |
Cost of debt | 4.0% | 7.0% |
After-tax WACC | 4.2% | 6.1% |
Selected WACC | 5.2% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
TEUFF | Box Ships Inc | 3956661.2 | 0 | 0 |
CMRE | Costamare Inc | 1.86 | 0.11 | 0.05 |
CPLP | Capital Product Partners LP | 1.8 | 0.03 | 0.01 |
CTRM | Castor Maritime Inc | 4.99 | 0.41 | 0.09 |
EDRY | EuroDry Ltd | 3.93 | 0.63 | 0.16 |
ESEA | Euroseas Ltd | 0.64 | 1.12 | 0.76 |
FREEF | FreeSeas Inc | 15261.37 | 0.52 | 0 |
GLBS | Globus Maritime Ltd | 3.57 | 0.39 | 0.11 |
GRIN | Grindrod Shipping Holdings Ltd | 0.76 | 0 | 0 |
NM | Navios Maritime Holdings Inc | 13.21 | 0.01 | 0 |
PSHG | Performance Shipping Inc | 2.15 | -0.22 | -0.09 |
Low | High | |
Unlevered beta | 0 | 0.05 |
Relevered beta | 0.01 | 0.1 |
Adjusted relevered beta | 0.34 | 0.4 |
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 TEUFF:
cost_of_equity (6.25%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.34) + 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.