YIPI WACC - Weighted Average Cost of Capital
The WACC of Yippy Inc (YIPI) is 3.8%.
| Range | Selected | |
| Cost of equity | 3.0% - 13.3% | 8.15% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 3.7% - 3.8% | 3.8% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | -1.6 | 0.35 |
| Additional risk adjustments | 6.5% | 7.0% |
| Cost of equity | 3.0% | 13.3% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 47.92 | 47.92 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 3.7% | 3.8% |
| Selected WACC | 3.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| YIPI | Yippy Inc | 47.92 | -119.68 | -3.33 |
| CRWG | Crowdgather Inc | 0.53 | -1.15 | -0.83 |
| DGTW | DigitalTown Inc | 429.14 | 0 | 0 |
| EVTI | Eventure Interactive Inc | 643.34 | 0.94 | 0 |
| FLYY.CN | Media Central Corporation Inc | 0.26 | -0.24 | -0.2 |
| ILIM | Il2m International Corp | 1.48 | -0.7 | -0.34 |
| MBO.V | Mobio Technologies Inc | 0.47 | -0.27 | -0.2 |
| RSS.V | Resaas Services Inc | 0 | 0.52 | 0.52 |
| WBWB | WU BA Superior Products Holding Group Inc | 10.72 | 0.18 | 0.02 |
| YOO.V | YANGAROO Inc | 0.6 | 0.77 | 0.53 |
| Low | High | |
| Unlevered beta | -0.2 | 0 |
| Relevered beta | -2.88 | 0.03 |
| Adjusted relevered beta | -1.6 | 0.35 |
YIPI'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 YIPI:
cost_of_equity (8.15%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (-1.6) + risk_adjustments (6.75%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.