XXII WACC - Weighted Average Cost of Capital
The WACC of 22nd Century Group Inc (XXII) is 5.9%.
| Range | Selected | |
| Cost of equity | 6.6% - 10.3% | 8.45% |
| Tax rate | 0.1% - 0.1% | 0.1% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.4% - 6.4% | 5.9% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.6 | 0.98 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.6% | 10.3% |
| Tax rate | 0.1% | 0.1% |
| Debt/Equity ratio | 2.78 | 2.78 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.4% | 6.4% |
| Selected WACC | 5.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| XXII | 22nd Century Group Inc | 2.78 | 2.51 | 0.67 |
| INVU | Investview Inc | 0.02 | -0.67 | -0.65 |
| MO | Altria Group Inc | 0.25 | 0.04 | 0.03 |
| NHLE | Nhale Inc | 0.72 | 1.01 | 0.59 |
| PM | Philip Morris International Inc | 0.17 | 0.1 | 0.09 |
| RLX | RLX Technology Inc | 0.02 | 0.32 | 0.32 |
| TPB | Turning Point Brands Inc | 0.19 | 0.72 | 0.61 |
| TRIP.CN | Red Light Holland Corp | 0.17 | 1.31 | 1.13 |
| VGR | Vector Group Ltd | 0.58 | 0.19 | 0.12 |
| VHUB | Vapor Hub International Inc | 3.84 | 1.04 | 0.22 |
| VPRB | VPR Brands LP | 0.32 | -0.28 | -0.22 |
| Low | High | |
| Unlevered beta | 0.12 | 0.32 |
| Relevered beta | 0.4 | 0.97 |
| Adjusted relevered beta | 0.6 | 0.98 |
XXII'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 XXII:
cost_of_equity (8.45%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.6) + 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.