AJX.TO
Agjunction Inc
Price:  
0.74 
CAD
Volume:  
79,030
United States | Communications Equipment

AJX.TO WACC - Weighted Average Cost of Capital

The WACC of Agjunction Inc (AJX.TO) is 7.0%.

The Cost of Equity of Agjunction Inc (AJX.TO) is 6.95%.
The Cost of Debt of Agjunction Inc (AJX.TO) is 7%.

RangeSelected
Cost of equity5.4% - 8.5%6.95%
Tax rate26.5% - 26.5%26.5%
Cost of debt7.0% - 7.0%7%
WACC5.4% - 8.5%7.0%
WACC

AJX.TO WACC calculation

CategoryLowHigh
Long-term bond rate3.4%3.9%
Equity market risk premium4.7%5.7%
Adjusted beta0.330.64
Additional risk adjustments0.5%1.0%
Cost of equity5.4%8.5%
Tax rate26.5%26.5%
Debt/Equity ratio
0.010.01
Cost of debt7.0%7.0%
After-tax WACC5.4%8.5%
Selected WACC7.0%

AJX.TO'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 AJX.TO:

cost_of_equity (6.95%) = risk_free_rate (3.65%) + equity_risk_premium (5.20%) * adjusted_beta (0.33) + risk_adjustments (0.75%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.