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FRPH (FRP Holdings) WACC % :6.27% (As of Dec. 15, 2024)


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What is FRP Holdings WACC %?

As of today (2024-12-15), FRP Holdings's weighted average cost of capital is 6.27%%. FRP Holdings's ROIC % is 1.65% (calculated using TTM income statement data). FRP Holdings earns returns that do not match up to its cost of capital. It will destroy value as it grows.

For a comprehensive WACC calculation, please access the WACC Calculator.


FRP Holdings WACC % Historical Data

The historical data trend for FRP Holdings's WACC % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

FRP Holdings WACC % Chart

FRP Holdings Annual Data
Trend Sep14 Sep15 Sep16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
WACC %
Get a 7-Day Free Trial Premium Member Only Premium Member Only 7.04 4.31 4.31 5.06 6.09

FRP Holdings Quarterly Data
Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23 Mar24 Jun24 Sep24
WACC % Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 6.62 6.09 6.08 5.97 5.54

Competitive Comparison of FRP Holdings's WACC %

For the Real Estate Services subindustry, FRP Holdings's WACC %, along with its competitors' market caps and WACC % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


FRP Holdings's WACC % Distribution in the Real Estate Industry

For the Real Estate industry and Real Estate sector, FRP Holdings's WACC % distribution charts can be found below:

* The bar in red indicates where FRP Holdings's WACC % falls into.



FRP Holdings WACC % Calculation

The weighted average cost of capital (WACC) is the rate that a company is expected to pay on average to all its security holders to finance its assets. The WACC is commonly referred to as the firm's cost of capital. Generally speaking, a company's assets are financed by debt and equity. WACC is the average of the costs of these sources of financing, each of which is weighted by its respective use in the given situation. By taking a weighted average, we can see how much interest the company has to pay for every dollar it finances.

WACC=E/(E + D)*Cost of Equity+D/(E + D)*Cost of Debt*(1 - Tax Rate)

1. Weights:
Generally speaking, a company's assets are financed by debt and equity. We need to calculate the weight of equity and the weight of debt.
The market value of equity (E) is also called "Market Cap". As of today, FRP Holdings's market capitalization (E) is $597.367 Mil.
The market value of debt is typically difficult to calculate, therefore, GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding the latest one-year quarterly average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together. As of Sep. 2024, FRP Holdings's latest one-year quarterly average Book Value of Debt (D) is $178.742 Mil.
a) weight of equity = E / (E + D) = 597.367 / (597.367 + 178.742) = 0.7697
b) weight of debt = D / (E + D) = 178.742 / (597.367 + 178.742) = 0.2303

2. Cost of Equity:
GuruFocus uses Capital Asset Pricing Model (CAPM) to calculate the required rate of return. The formula is:
Cost of Equity = Risk-Free Rate of Return + Beta of Asset * (Expected Return of the Market - Risk-Free Rate of Return)
a) GuruFocus uses 10-Year Treasury Constant Maturity Rate as the risk-free rate. It is updated daily. The current risk-free rate is 4.395%. Please go to Economic Indicators page for more information. Please note that we use the 10-Year Treasury Constant Maturity Rate of the country/region where the company is headquartered. If the data for that country/region is not available, then we will use the 10-Year Treasury Constant Maturity Rate of the United States as default.
b) Beta is the sensitivity of the expected excess asset returns to the expected excess market returns. FRP Holdings's beta is 0.55.
c) (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
Cost of Equity = 4.395% + 0.55 * 6% = 7.695%

3. Cost of Debt:
GuruFocus uses latest TTM Interest Expense divided by the latest one-year quarterly average debt to get the simplified cost of debt.
As of Sep. 2024, FRP Holdings's interest expense (positive number) was $3.546 Mil. Its total Book Value of Debt (D) is $178.742 Mil.
Cost of Debt = 3.546 / 178.742 = 1.9839%.

4. Multiply by one minus TTM Tax Rate:
GuruFocus uses the most recent TTM Tax Expense divided by the most recent TTM Pre-Tax Income to calculate the tax rate. The calculated TTM tax rate is limited to between 0% and 100%. If the calculated tax rate is higher than 100%, it is set to 100%. If the calculated tax rate is less than 0%, it is set to 0%.
The latest calculated TTM Tax Rate = 2.361 / 10.019 = 23.57%.

FRP Holdings's Weighted Average Cost Of Capital (WACC) for Today is calculated as:

WACC=E / (E + D)*Cost of Equity+D / (E + D)*Cost of Debt*(1 - Tax Rate)
=0.7697*7.695%+0.2303*1.9839%*(1 - 23.57%)
=6.27%

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


FRP Holdings  (NAS:FRPH) WACC % Explanation

Because it costs money to raise capital. A firm that generates higher ROIC % than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.

As of today, FRP Holdings's weighted average cost of capital is 6.27%%. FRP Holdings's ROIC % is 1.65% (calculated using TTM income statement data). FRP Holdings earns returns that do not match up to its cost of capital. It will destroy value as it grows.


Be Aware

1. GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding latest one-year quarterly average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together.
For companies that report quarterly, GuruFocus combines all of the most recent year's quarterly debt data from the beginning of the year to the year-end and calculates the average.
For companies that report semi-annually, GuruFocus combines all of the most recent year's semi-annual debt data from the start of the year to the year-end and calculates the average.
For companies that report annually, GuruFocus combines the beginning and ending annual debt data from the most recent year and then calculates the average.

2. The WACC formula discussed above does not include Preferred Stock. Please adjust if preferred stock is considered.

3. (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.

4. GuruFocus uses the latest TTM Interest Expense divided by the latest one-year quarterly average debt to get the simplified cost of debt.


Related Terms

FRP Holdings Business Description

Traded in Other Exchanges
N/A
Address
200 West Forsyth Street, 7th Floor, Jacksonville, FL, USA, 32202
FRP Holdings Inc is a holding company engaged in various real estate businesses. The company's business segments are Leasing and management of commercial properties owned by the company (the Industrial/Commercial Segment); Leasing and management of mining royalty land owned by the company (the Mining Royalty Lands Segment); real property acquisition, entitlement, development and construction for apartment, retail, warehouse, and office buildings either alone or through joint ventures (the Development Segment); ownership, leasing and management of buildings through joint ventures (the Multifamily Segment).
Executives
Stein Martin E Jr director ONE INDEPENDENT DRIVE, SUITE 114, JACKSONVILLE FL 32202
Devilliers David H Jr officer: President of Real Estate Group 200 W. FORSYTH STREET, 7TH FLOOR, JACKSONVILLE FL 32202
Milton John D Jr officer: Executive VP and CFO 200 W. FORSYTH STREET, 7TH FLOOR, JACKSONVILLE FL 32202
Devilliers David H Iii officer: Executive Vice President 200 WEST FORSYTH STREET, 7TH FLOOR, JACKSONVILLE FL 32202
Baker John D Ii director, 10 percent owner 200 W. FORSYTH STREET, 7TH FLOOR, JACKSONVILLE FL 32202
John S Surface director 200 W. FORSYTH STREET, 7TH FLOOR, JACKSONVILLE FL 32202
Nicole B. Thomas director 200 W. FORSYTH ST, 7TH FLOOR, JACKSONVILLE FL 32202
Baker John D. Iii officer: Chief Financial Officer FRP HOLDINGS, INC., 200 WEST FORSYTH STREET, 7TH FLOOR, JACKSONVILLE FL 32202
John D Klopfenstein officer: Controller and CAO 200 W. FORSYTH STREET, 7TH FLOOR, JACKSONVILLE FL 32202
Margaret B. Wetherbee director FRP HOLDINGS, INC., 200 WEST FORSYTH STREET, JACKSONVILLE FL 32202
Commander Charles E Iii director 200 W. FORSYTH STREET, 7TH FLOOR, JACKSONVILLE FL 32202
James H Winston director C/O STEIN MORT INC, 1200 RIVERPLACE BLVD, JACKSONVILLE FL 32207
Walton William H Iii director ONE INDEPENDENT DRIVE, SUITE 1600, JACKSONVILLE FL 32202
Baker Thompson S Ii director, 10 percent owner 200 W. FORSYTH STREET, 7TH FLOOR, JACKSONVILLE FL 32202
Robert E Sandlin officer: President & CEO of FRTL 200 W. FORSYTH STREET, 7TH FLOOR, JACKSONVILLE FL 32202