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RM2 International (RM2 International) WACC % :1.36% (As of Apr. 28, 2024)


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What is RM2 International WACC %?

As of today (2024-04-28), RM2 International's weighted average cost of capital is 1.36%%. RM2 International's ROIC % is 0.00% (calculated using TTM income statement data). RM2 International 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.


RM2 International WACC % Historical Data

The historical data trend for RM2 International'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.

RM2 International WACC % Chart

RM2 International Annual Data
Trend Dec10 Dec11 Jun13 Jun14 Jun15 Jun16 Jun17 Jun18 Jun19 Jun20
WACC %
Get a 7-Day Free Trial Premium Member Only Premium Member Only 12.58 13.17 12.98 7.91 6.36

RM2 International Quarterly Data
Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17 Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Jun20
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 10.61 9.35 7.16 7.91 6.36

Competitive Comparison of RM2 International's WACC %

For the Metal Fabrication subindustry, RM2 International'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.


RM2 International's WACC % Distribution in the Industrial Products Industry

For the Industrial Products industry and Industrials sector, RM2 International's WACC % distribution charts can be found below:

* The bar in red indicates where RM2 International's WACC % falls into.



RM2 International 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, RM2 International's market capitalization (E) is $32.466 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 Jun. 2020, RM2 International's latest one-year quarterly average Book Value of Debt (D) is $47.146 Mil.
a) weight of equity = E / (E + D) = 32.466 / (32.466 + 47.146) = 0.4078
b) weight of debt = D / (E + D) = 47.146 / (32.466 + 47.146) = 0.5922

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 4.663%. 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. RM2 International's beta is -0.22.
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 = 4.663% + -0.22 * 6% = 3.343%

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 Jun. 2020, RM2 International's interest expense (positive number) was $-0 Mil. Its total Book Value of Debt (D) is $47.146 Mil.
Cost of Debt = -0 / 47.146 = 0%.

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 = 0 / 0 = %.

RM2 International'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)
=0.4078*3.343%+0.5922*0%*(1 - 0%)
=1.36%

* 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.


RM2 International  (OTCPK:RMTO) 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, RM2 International's weighted average cost of capital is 1.36%%. RM2 International's ROIC % is 0.00% (calculated using TTM income statement data). RM2 International 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

RM2 International (RM2 International) Business Description

Traded in Other Exchanges
N/A
Address
810 Flightline Boulevard, Deland, FL, USA, 32724
RM2 International Inc leases robust composite pallets to replace wooden pallets, including smart Internet of Things (IoT) technologies, to improve logistics. In every BLOCKPal pallet, embedded IoT sensors capture location, temperature, shock & tilt, and movement. Sensor data is transmitted via a high-speed LTE-M network to RM2's secure cloud database. RM2 issues, retrieves, and sanitizes more than 1.5 million of its hygienic IoT pallets annually through a nationwide network of over 30 service facilities in a cost-effective, scalable, and environmentally sustainable pallet pooling system.
Executives
Brian Knaley other: Former Officer C/O ARC GROUP WORLDWIDE, INC., 810 FLIGHTLINE BLVD., DELAND FL 32724
Everest Hill Group Inc. 10 percent owner TROPIC ISLE BUILDING, P O BOX 3331, ROAD TOWN TORTOLA D8 VG 1110
Alan G Quasha director 127 EAST 73RD STREET, NEW YORK NY 10021
Theodore Deinard other: Former Interim CEO, CFO, & Dir C/O ARC WIRELESS SOLUTIONS, INC., 6330 NORTH WASHINGTON ST., SUITE 13, DENVER CO 80216
Javier Baz director 1100 HUMBOLDT STREET, DENVER CO 80218
Robert E Wade director C/O FRANKLIN RESOURCES INC, ONE FRANKLIN PARKWAY, SAN MATEO CA 94403
Randall P Marx director, officer: CEO, President & Secretary
Monty R Lamirato officer: CFO