The WACC of Global Payment Technologies Inc (GPTX) is 14.5%.
| Range | Selected | |
| Cost of equity | 53,055.50% - 85,317.90% | 69,186.70% |
| Tax rate | 0.50% - 1.80% | 1.15% |
| Cost of debt | 7.00% - 19.60% | 13.30% |
| WACC | 8.0% - 21.0% | 14.5% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 11532.96 | 15234.48 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 53,055.50% | 85,317.90% |
| Tax rate | 0.50% | 1.80% |
| Debt/Equity ratio | 50906.74 | 50906.74 |
| Cost of debt | 7.00% | 19.60% |
| After-tax WACC | 8.0% | 21.0% |
| Selected WACC | 14.5% | |
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 (69,186.70%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (11532.96) + 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.