TOFB WACC - Weighted Average Cost of Capital
The WACC of Tofutti Brands Inc (TOFB) is 7.6%.
| Range | Selected | |
| Cost of equity | 6.3% - 8.8% | 7.55% |
| Tax rate | 31.4% - 35.6% | 33.5% |
| Cost of debt | 4.0% - 7.0% | 5.5% |
| WACC | 6.3% - 8.8% | 7.6% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.54 | 0.71 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.3% | 8.8% |
| Tax rate | 31.4% | 35.6% |
| Debt/Equity ratio | 0.01 | 0.01 |
| Cost of debt | 4.0% | 7.0% |
| After-tax WACC | 6.3% | 8.8% |
| Selected WACC | 7.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| TOFB | Tofutti Brands Inc | 0.01 | 0.61 | 0.61 |
| ANPFF | Anpulo Food Inc | 0.84 | 0.93 | 0.59 |
| BRFH | Barfresh Food Group Inc | 0.02 | 0.86 | 0.85 |
| BSFC | Blue Star Foods Corp | 0.77 | 1.76 | 1.15 |
| CUBV | CUBA Beverage Co | 0.17 | -0.09 | -0.08 |
| GB.V | Ginger Beef Corp | 0.38 | 0.19 | 0.15 |
| GLG.TO | Glg Life Tech Corp | 33.27 | -0.49 | -0.02 |
| HCEI | Healthy Coffee International Inc | 0.03 | 0 | 0 |
| PETZ | TDH Holdings Inc | 0.04 | 0.56 | 0.55 |
| RMCF | Rocky Mountain Chocolate Factory Inc (Delaware) | 0.13 | 0.45 | 0.41 |
| Low | High | |
| Unlevered beta | 0.31 | 0.56 |
| Relevered beta | 0.31 | 0.57 |
| Adjusted relevered beta | 0.54 | 0.71 |
TOFB'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 TOFB:
cost_of_equity (7.55%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.54) + 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.