ECM.V WACC - Weighted Average Cost of Capital

The WACC of Ecolomondo Corp (ECM.V) is 7.1%.

The Cost of Equity of Ecolomondo Corp (ECM.V) is 8.50%.

The Cost of Debt of Ecolomondo Corp (ECM.V) is 5.50%.

	Range	Selected
Cost of equity	7.40% - 9.60%	8.50%
Tax rate	6.80% - 11.60%	9.20%
Cost of debt	4.00% - 7.00%	5.50%
WACC	6.0% - 8.3%	7.1%

WACC

ECM.V WACC calculation

Category	Low	High

Long-term bond rate	3.9%	4.4%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.69	0.78

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.40%	9.60%

Tax rate	6.80%	11.60%
Debt/Equity ratio	0.63	0.63
Cost of debt	4.00%	7.00%

After-tax WACC	6.0%	8.3%


Selected WACC	7.1%

ECM.V'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 ECM.V:

cost_of_equity (8.50%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (0.69) + 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.