The WACC of Global Payment Technologies Inc (GPTX) is 15.0%.
| Range | Selected | |
| Cost of equity | 761.80% - 1,139.10% | 950.45% |
| Tax rate | 0.50% - 1.80% | 1.15% |
| Cost of debt | 7.00% - 19.60% | 13.30% |
| WACC | 8.4% - 21.5% | 15.0% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 164.76 | 202.55 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 761.80% | 1,139.10% |
| Tax rate | 0.50% | 1.80% |
| Debt/Equity ratio | 509.07 | 509.07 |
| Cost of debt | 7.00% | 19.60% |
| After-tax WACC | 8.4% | 21.5% |
| Selected WACC | 15.0% | |
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 GPTX:
cost_of_equity (950.45%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (164.76) + 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.