ERA.V WACC - Weighted Average Cost of Capital

The WACC of Elcora Advanced Materials Corp (ERA.V) is 5.4%.

The Cost of Equity of Elcora Advanced Materials Corp (ERA.V) is 6.25%.

The Cost of Debt of Elcora Advanced Materials Corp (ERA.V) is 5.00%.

	Range	Selected
Cost of equity	4.70% - 7.80%	6.25%
Tax rate	26.20% - 27.00%	26.60%
Cost of debt	5.00% - 5.00%	5.00%
WACC	4.4% - 6.5%	5.4%

WACC

ERA.V WACC calculation

Category	Low	High

Long-term bond rate	3.9%	4.4%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.06	0.41

Additional risk adjustments	0.5%	1.0%
Cost of equity	4.70%	7.80%

Tax rate	26.20%	27.00%
Debt/Equity ratio	0.47	0.47
Cost of debt	5.00%	5.00%

After-tax WACC	4.4%	6.5%


Selected WACC	5.4%

ERA.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 ERA.V:

cost_of_equity (6.25%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (0.06) + risk_adjustments (0.75%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.