The WACC of Digicrypts Blockchain Solutions Inc (DIGI.CN) is 7.8%.
| Range | Selected | |
| Cost of equity | 8.30% - 13.10% | 10.70% |
| Tax rate | 0.50% - 4.10% | 2.30% |
| Cost of debt | 5.00% - 5.00% | 5.00% |
| WACC | 6.6% - 9.0% | 7.8% |
| Category | Low | High |
| Long-term bond rate | 3.6% | 4.1% |
| Equity market risk premium | 5.5% | 6.5% |
| Adjusted beta | 0.86 | 1.32 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.30% | 13.10% |
| Tax rate | 0.50% | 4.10% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.00% | 5.00% |
| After-tax WACC | 6.6% | 9.0% |
| Selected WACC | 7.8% | |
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 DIGI.CN:
cost_of_equity (10.70%) = risk_free_rate (3.85%) + equity_risk_premium (6.00%) * adjusted_beta (0.86) + 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.