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Riot Blockchain WACC %

:29.91% (As of Today)
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As of today (2021-10-22), Riot Blockchain's weighted average cost of capital is 29.91%. Riot Blockchain's ROIC % is 8.40% (calculated using TTM income statement data). Riot Blockchain earns returns that do not match up to its cost of capital. It will destroy value as it grows.


Riot Blockchain WACC % Historical Data

The historical data trend for Riot Blockchain'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.

Riot Blockchain Annual Data
Trend Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20
WACC %
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 19.04 30.37 24.25 20.43 27.42

Riot Blockchain Quarterly Data
Sep16 Dec16 Mar17 Jun17 Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21
WACC % 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 Premium Member Only Premium Member Only Premium Member Only 20.06 20.83 27.42 30.29 29.04

Competitive Comparison

For the Software - Application subindustry, Riot Blockchain'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.

   

Riot Blockchain WACC % Distribution

For the Software industry and Technology sector, Riot Blockchain's WACC % distribution charts can be found below:

* The bar in red indicates where Riot Blockchain's WACC % falls into.



Riot Blockchain 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, Riot Blockchain's market capitalization (E) is $2713.502 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 two-year average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together. As of Jun. 2021, Riot Blockchain's latest two-year average Short-Term Debt & Capital Lease Obligation was $0.184 Mil and its latest two-year average Long-Term Debt & Capital Lease Obligation was $0 Mil. The total Book Value of Debt (D) is $0.184 Mil.
a) weight of equity = E / (E + D) = 2713.502 / (2713.502 + 0.184) = 0.9999
b) weight of debt = D / (E + D) = 0.184 / (2713.502 + 0.184) = 0.0001

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 1.65000000%. 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. Riot Blockchain's beta is 4.71.
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 = 1.65000000% + 4.71 * 6% = 29.91%

3. Cost of Debt:
GuruFocus uses last fiscal year end Interest Expense divided by the latest two-year average debt to get the simplified cost of debt.
As of Dec. 2020, Riot Blockchain's interest expense (positive number) was $0.122 Mil. Its total Book Value of Debt (D) is $0.184 Mil.
Cost of Debt = 0.122 / 0.184 = 66.3043%.

4. Multiply by one minus Average Tax Rate:
GuruFocus uses the latest two-year average tax rate to do the calculation. The calculated average tax rate is limited to between 0% and 100%. If the calculated average tax rate is higher than 100%, it is set to 100%. If the calculated average tax rate is less than 0%, it is set to 0%.
The latest Two-year Average Tax Rate is 0.35%.

Riot Blockchain'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)
=0.9999*29.91%+0.0001*66.3043%*(1 - 0.35%)
=29.91%

* 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.


Riot Blockchain  (NAS:RIOT) 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, Riot Blockchain's weighted average cost of capital is 29.91%. Riot Blockchain's ROIC % is 8.40% (calculated using TTM income statement data). Riot Blockchain 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 two-year average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together.

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 last fiscal year end Interest Expense divided by the latest two-year average debt to get the simplified cost of debt.


Related Terms

Riot Blockchain Business Description

Riot Blockchain logo
Industry
Technology » Software NAICS : 511210 SIC : 5045
Traded in Other Exchanges
Address
202 6th Street, Suite 401, Castle Rock, CO, USA, 80104
Riot Blockchain Inc is focused on building, supporting, and operating blockchain technologies. Distributed blockchain technology is a decentralized and encrypted ledger that is designed to offer a secure, efficient, verifiable, and permanent way of storing records and other information without the need for intermediaries. It serves as a medium of exchange, store of value, or unit of account. It operates in a single segment of cryptocurrency mining. The company's portfolio consists of Verady, Tesspay, Coinsquare, and others.
Executives
Yi Soo Il Benjamin director C/O RIOT BLOCKCHAIN, INC. 202 6TH STREET, SUITE 401 CASTLE ROCK CO 80104
Mcgonegal Jeffrey officer: Chief Executive Officer 1905 W VALLEY VISTA DR CASTLE ROCK CO 80104
Les Jason director 1808 HUMMINGBIRD DR. COSTA MESA CA 92626
Mancini Remo director 6 LAIRD AVENUE SOUTH AMHERSTBURG A6 N9V 1X5
Chang Robby Sai Kit officer: Chief Financial Officer 1807-18 HARBOUR STREET TORONTO A6 M5J 2Z6
Ensey Christopher officer: Interim CEO 2307 NE 12TH ST. FT. LAUDERDALE FL 33304
Kaplan Andrew J director SUITE 200 623 RIVER ROAD FAIR HAVEN NJ 07704
Robertsen Daniel Stefan officer: President of subsidiary SELJORDVEGEN 788 3803 BO TELEMARK Q8 00000
Beeghley Michael Martin other: Former CEO, Chairman 1170 PEACHTREE ST. SUITE 525 ATLANTA GA 30309
So Eric director 2 DIMARINO DRIVE MAPLE A6 L6A 0E1
Dai Mike director 66 SNOW LEOPARD COURT, BRAMPTON A6 L6R 2L7
Lundy Steve director, officer: President, CEO C/O VENAXIS, INC. 1585 S. PERRY STREET CASTLE ROCK CO 80104
Honig Barry C 10 percent owner 215 SE SPANISH TRAIL BOCA RATON FL 33432
Routh Michael W director PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"> Ownership Information: ROUTH MICHAEL W a.header:link {color: #3b4fae; font-weight: bold; text-decoration: underline;} a.header:visited {color: #3b4fae; font-weight: bold; text-decoration: underline;} a.header:hover {color: #191970;}
Whitcomb Richard J. officer: Senior Vice President C/O VENAXIS, INC. 1585 S. PERRY ST CASTLE ROCK CO 80104-1931

Riot Blockchain Headlines

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