The WACC of Generation Next Franchise Brands Inc (VEND) is 8.0%.
| Range | Selected | |
| Cost of equity | 1,960.70% - 68,166.40% | 35,063.55% |
| Tax rate | -% - 0.10% | 0.05% |
| Cost of debt | 7.00% - 7.80% | 7.40% |
| WACC | 7.0% - 9.0% | 8.0% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 4.2% | 5.2% |
| Adjusted beta | 461.68 | 13008.07 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 1,960.70% | 68,166.40% |
| Tax rate | -% | 0.10% |
| Debt/Equity ratio | 57425.86 | 57425.86 |
| Cost of debt | 7.00% | 7.80% |
| After-tax WACC | 7.0% | 9.0% |
| Selected WACC | 8.0% | |
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 VEND:
cost_of_equity (35,063.55%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (461.68) + 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.