FP.V WACC - Weighted Average Cost of Capital
The WACC of FP Newspapers Inc (FP.V) is 7.1%.
| Range | Selected | |
| Cost of equity | 7.2% - 13.8% | 10.5% |
| Tax rate | 17.1% - 38.6% | 27.85% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.7% - 8.4% | 7.1% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.66 | 1.46 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.2% | 13.8% |
| Tax rate | 17.1% | 38.6% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.7% | 8.4% |
| Selected WACC | 7.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| FP.V | FP Newspapers Inc | 0.97 | 0.48 | 0.28 |
| ACNI | American Community Newspapers Inc | 2.36 | 1.27 | 0.47 |
| CRWE | Crown Equity Holdings Inc | 0 | 1.66 | 1.66 |
| DJCO | Daily Journal Corp | 0.05 | 0.94 | 0.91 |
| GVC.TO | Glacier Media Inc | 0.61 | 0.44 | 0.31 |
| LEE | Lee Enterprises Inc | 10.54 | 0.94 | 0.11 |
| LM.V | Lingo Media Corp | 0.03 | 1.41 | 1.38 |
| MDP | Meredith Corp | 1.02 | 2.06 | 1.18 |
| PNC.A.TO | Postmedia Network Canada Corp | 2.54 | 0.73 | 0.26 |
| SCHL | Scholastic Corp | 0.02 | 1.09 | 1.08 |
| Low | High | |
| Unlevered beta | 0.4 | 0.97 |
| Relevered beta | 0.49 | 1.69 |
| Adjusted relevered beta | 0.66 | 1.46 |
FP.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 FP.V:
cost_of_equity (10.50%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (0.66) + 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.