BLDP.TO
Ballard Power Systems Inc
Price:  
2.82 
CAD
Volume:  
391,921.00
Canada | Electrical Equipment
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BLDP.TO WACC - Weighted Average Cost of Capital

The WACC of Ballard Power Systems Inc (BLDP.TO) is 7.4%.

The Cost of Equity of Ballard Power Systems Inc (BLDP.TO) is 7.45%.
The Cost of Debt of Ballard Power Systems Inc (BLDP.TO) is 5.00%.

Range Selected
Cost of equity 6.40% - 8.50% 7.45%
Tax rate 0.10% - 0.10% 0.10%
Cost of debt 5.00% - 5.00% 5.00%
WACC 6.3% - 8.4% 7.4%
WACC

BLDP.TO WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.63 0.72
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.40% 8.50%
Tax rate 0.10% 0.10%
Debt/Equity ratio 0.04 0.04
Cost of debt 5.00% 5.00%
After-tax WACC 6.3% 8.4%
Selected WACC 7.4%

BLDP.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 BLDP.TO:

cost_of_equity (7.45%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.63) + 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.