TNBI WACC - Weighted Average Cost of Capital
The WACC of Tanke Biosciences Corp (TNBI) is 38.8%.
| Range | Selected | |
| Cost of equity | 5.7% - 15.7% | 10.7% |
| Tax rate | 8.2% - 19.3% | 13.75% |
| Cost of debt | 7.0% - 96.3% | 51.65% |
| WACC | 6.4% - 71.3% | 38.8% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.4 | 1.94 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.7% | 15.7% |
| Tax rate | 8.2% | 19.3% |
| Debt/Equity ratio | 8.64 | 8.64 |
| Cost of debt | 7.0% | 96.3% |
| After-tax WACC | 6.4% | 71.3% |
| Selected WACC | 38.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| TNBI | Tanke Biosciences Corp | 8.64 | 5.02 | 0.59 |
| AFAP | AFA Protective Systems Inc | 0.04 | 0.94 | 0.91 |
| AHAG | Alpha Technologies Group Inc | 2.1 | -1.02 | -0.36 |
| HCLC | Health-Chem Corp | 4.27 | 0.14 | 0.03 |
| LMDX | LumiraDx Ltd | 68.76 | -1.43 | -0.02 |
| LUVU | Luvu Brands Inc | 0.9 | 0.72 | 0.41 |
| NDVR | Ultra Motorcycle Co | 2.16 | 0 | 0 |
| QRSM | QRS Music Technologies Inc | 1.02 | 1.53 | 0.81 |
| SORT | IncJet Holding Inc | 0.27 | 0.58 | 0.47 |
| TOOD | Thermwood Corp | 0.26 | 0.25 | 0.2 |
| VULC | Vulcan International Corp | 23.06 | 0.46 | 0.02 |
| Low | High | |
| Unlevered beta | 0.03 | 0.41 |
| Relevered beta | 0.1 | 2.4 |
| Adjusted relevered beta | 0.4 | 1.94 |
TNBI'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 TNBI:
cost_of_equity (10.70%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.4) + 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.