CSIQ
Canadian Solar Inc
Price:  
9.55 
USD
Volume:  
1,233,928.00
Canada | Semiconductors & Semiconductor Equipment
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CSIQ WACC - Weighted Average Cost of Capital

The WACC of Canadian Solar Inc (CSIQ) is 6.2%.

The Cost of Equity of Canadian Solar Inc (CSIQ) is 25.10%.
The Cost of Debt of Canadian Solar Inc (CSIQ) is 5.00%.

Range Selected
Cost of equity 19.50% - 30.70% 25.10%
Tax rate 17.90% - 20.30% 19.10%
Cost of debt 5.00% - 5.00% 5.00%
WACC 5.7% - 6.7% 6.2%
WACC

CSIQ WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 3.41 4.61
Additional risk adjustments 0.0% 0.5%
Cost of equity 19.50% 30.70%
Tax rate 17.90% 20.30%
Debt/Equity ratio 8.89 8.89
Cost of debt 5.00% 5.00%
After-tax WACC 5.7% 6.7%
Selected WACC 6.2%

CSIQ'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 CSIQ:

cost_of_equity (25.10%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (3.41) + 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.