VERU WACC - Weighted Average Cost of Capital
The WACC of Veru Inc (VERU) is 7.8%.
| Range | Selected | |
| Cost of equity | 5.8% - 7.9% | 6.85% |
| Tax rate | 1.4% - 3.3% | 2.35% |
| Cost of debt | 7.0% - 25.1% | 16.05% |
| WACC | 5.9% - 9.6% | 7.8% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.42 | 0.55 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.8% | 7.9% |
| Tax rate | 1.4% | 3.3% |
| Debt/Equity ratio | 0.12 | 0.12 |
| Cost of debt | 7.0% | 25.1% |
| After-tax WACC | 5.9% | 9.6% |
| Selected WACC | 7.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| VERU | Veru Inc | 0.12 | 0.64 | 0.58 |
| BTTR | Better Choice Company Inc | 0.47 | 0.43 | 0.29 |
| CHHE | China Health Industries Holdings Inc | 78639.3 | 0.4 | 0 |
| CYAN | Cyanotech Corp | 2.03 | -0.12 | -0.04 |
| HAPP | Happiness Biotech Group Ltd | 0.15 | 0.22 | 0.19 |
| ICAN.CN | Icanic Brands Company Inc | 0.12 | 1.2 | 1.07 |
| MDVL | Medavail Holdings Inc | 1.7 | 0.76 | 0.29 |
| NAII | Natural Alternatives International Inc | 0.63 | -0.11 | -0.07 |
| NTRB | Nutriband Inc | 0 | 1.45 | 1.44 |
| TLCC | Twinlab Consolidated Holdings Inc | 722.81 | 0.71 | 0 |
| Low | High | |
| Unlevered beta | 0.12 | 0.29 |
| Relevered beta | 0.13 | 0.33 |
| Adjusted relevered beta | 0.42 | 0.55 |
VERU'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 VERU:
cost_of_equity (6.85%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.42) + 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.