DGTW
DigitalTown Inc
Price:  
USD
Volume:  
944,500
United States | Interactive Media & Services

DGTW WACC - Weighted Average Cost of Capital

The WACC of DigitalTown Inc (DGTW) is 3.8%.

The Cost of Equity of DigitalTown Inc (DGTW) is 43.35%.
The Cost of Debt of DigitalTown Inc (DGTW) is 5%.

RangeSelected
Cost of equity3.5% - 83.2%43.35%
Tax rate26.2% - 27.0%26.6%
Cost of debt5.0% - 5.0%5%
WACC3.7% - 3.8%3.8%
WACC

DGTW WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta-16.50.5
Additional risk adjustments75.5%76.0%
Cost of equity3.5%83.2%
Tax rate26.2%27.0%
Debt/Equity ratio
429.14429.14
Cost of debt5.0%5.0%
After-tax WACC3.7%3.8%
Selected WACC3.8%

DGTW'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 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.