DIGAF WACC - Weighted Average Cost of Capital
The WACC of Digatrade Financial Corp (DIGAF) is 3.9%.
| Range | Selected | |
| Cost of equity | 5.4% - 33.4% | 19.4% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 3.7% - 4.1% | 3.9% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.32 | 5.1 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.4% | 33.4% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 70.86 | 70.86 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 3.7% | 4.1% |
| Selected WACC | 3.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| DIGAF | Digatrade Financial Corp | 70.86 | 0 | 0 |
| ARM.CN | Armada Mercantile Ltd | 0 | -1.52 | -1.52 |
| BEGI | Blackstar Enterprise Group Inc | 1.06 | -1.48 | -0.83 |
| COIN.V | Coin Hodl Inc | 0.01 | -0.06 | -0.06 |
| FUTU | Futu Holdings Ltd | 0.23 | 1.44 | 1.24 |
| GBC.CN | Greenbank Capital Inc | 2.62 | 0.35 | 0.12 |
| HKIB | Amtd International Inc | 0.04 | 0.91 | 0.88 |
| IGEX | Indo Global Exchange(s) Pte Ltd | 0.06 | 0.16 | 0.16 |
| MNC.V | Magnetic North Acquisition Corp | 2.3 | 2.1 | 0.78 |
| WSFL | Woodstock Holdings Inc | 3380.65 | -0.89 | 0 |
| Low | High | |
| Unlevered beta | 0 | 0.14 |
| Relevered beta | -0.01 | 7.12 |
| Adjusted relevered beta | 0.32 | 5.1 |
DIGAF'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 DIGAF:
cost_of_equity (19.40%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.32) + 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.