The WACC of Ciscom Corp (CISC.CN) is 5.3%.
| Range | Selected | |
| Cost of equity | 3.20% - 3.30% | 3.25% |
| Tax rate | 8.20% - 17.30% | 12.75% |
| Cost of debt | 7.00% - 7.00% | 7.00% |
| WACC | 5.6% - 5.1% | 5.3% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | -1.05 | -1.05 |
| Additional risk adjustments | 5.5% | 6.0% |
| Cost of equity | 3.20% | 3.30% |
| Tax rate | 8.20% | 17.30% |
| Debt/Equity ratio | 2.72 | 2.72 |
| Cost of debt | 7.00% | 7.00% |
| After-tax WACC | 5.6% | 5.1% |
| Selected WACC | 5.3% | |
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 CISC.CN:
cost_of_equity (3.25%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (-1.05) + risk_adjustments (5.75%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.