The WACC of DigitalTown Inc (DGTW) is 3.8%.
Range | Selected | |
Cost of equity | 3.5% - 83.2% | 43.35% |
Tax rate | 26.2% - 27.0% | 26.6% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 3.7% - 3.8% | 3.8% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 4.6% | 5.6% |
Adjusted beta | -16.5 | 0.5 |
Additional risk adjustments | 75.5% | 76.0% |
Cost of equity | 3.5% | 83.2% |
Tax rate | 26.2% | 27.0% |
Debt/Equity ratio | 429.14 | 429.14 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 3.7% | 3.8% |
Selected WACC | 3.8% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
DGTW | DigitalTown Inc | 429.14 | 0 | 0 |
CRWG | Crowdgather Inc | 0.53 | -1.15 | -0.83 |
EVTI | Eventure Interactive Inc | 643.34 | 0.94 | 0 |
FLYY.CN | Media Central Corporation Inc | 0.26 | -0.24 | -0.2 |
ILIM | Il2m International Corp | 1.48 | -0.7 | -0.34 |
MBO.V | Mobio Technologies Inc | 0.47 | -0.27 | -0.2 |
MKT.V | Deepmarkit Corp | 0.07 | 0.96 | 0.91 |
WBWB | WU BA Superior Products Holding Group Inc | 10.72 | 0.18 | 0.02 |
YOO.V | YANGAROO Inc | 0.6 | 0.77 | 0.53 |
Low | High | |
Unlevered beta | -0.16 | 0 |
Relevered beta | -25.12 | 0.25 |
Adjusted relevered beta | -16.5 | 0.5 |
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 DGTW:
cost_of_equity (43.35%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (-16.5) + risk_adjustments (75.75%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.