APP.BK WACC - Weighted Average Cost of Capital

The WACC of AppliCAD PCL (APP.BK) is 7.6%.

The Cost of Equity of AppliCAD PCL (APP.BK) is 7.70%.

The Cost of Debt of AppliCAD PCL (APP.BK) is 6.90%.

	Range	Selected
Cost of equity	6.30% - 9.10%	7.70%
Tax rate	21.30% - 23.50%	22.40%
Cost of debt	4.00% - 9.80%	6.90%
WACC	6.2% - 9.1%	7.6%

WACC

APP.BK WACC calculation

Category	Low	High

Long-term bond rate	2.6%	3.1%
Equity market risk premium	7.4%	8.4%
Adjusted beta	0.5	0.66

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.30%	9.10%

Tax rate	21.30%	23.50%
Debt/Equity ratio	0.03	0.03
Cost of debt	4.00%	9.80%

After-tax WACC	6.2%	9.1%


Selected WACC	7.6%

APP.BK'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 APP.BK:

cost_of_equity (7.70%) = risk_free_rate (2.85%) + equity_risk_premium (7.90%) * adjusted_beta (0.5) + risk_adjustments (0.25%)

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