CDTI WACC - Weighted Average Cost of Capital
The WACC of CDTi Advanced Materials Inc (CDTI) is 6.2%.
| Range | Selected | |
| Cost of equity | 6.8% - 10.2% | 8.5% |
| Tax rate | 19.0% - 24.2% | 21.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.4% - 7.0% | 6.2% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.64 | 0.95 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.8% | 10.2% |
| Tax rate | 19.0% | 24.2% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.4% | 7.0% |
| Selected WACC | 6.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| CDTI | CDTi Advanced Materials Inc | 0.95 | 0.04 | 0.02 |
| CAAS | China Automotive Systems Inc | 1.37 | 0.79 | 0.38 |
| ESWW | Environmental Solutions Worldwide Inc | 42548.29 | -0.56 | 0 |
| OMTK | Omnitek Engineering Corp | 0.59 | 0.11 | 0.08 |
| SSA.V | Spectra Products Inc | 0.07 | 0.63 | 0.6 |
| STRT | Strattec Security Corp | 0.08 | 1.35 | 1.28 |
| TRBD | Turbodyne Technologies Inc | 729.16 | 0 | 0 |
| VC | Visteon Corp | 0.14 | 0.53 | 0.48 |
| WKHS | Workhorse Group Inc | 2.15 | 1.64 | 0.61 |
| XTC.TO | Exco Technologies Ltd | 0.45 | 0.9 | 0.67 |
| Low | High | |
| Unlevered beta | 0.26 | 0.53 |
| Relevered beta | 0.46 | 0.93 |
| Adjusted relevered beta | 0.64 | 0.95 |
CDTI'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 CDTI:
cost_of_equity (8.50%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.64) + 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.