The WACC of NanoXplore Inc (GRA.V) is 7.9%.
| Range | Selected | |
| Cost of equity | 6.00% - 9.50% | 7.75% |
| Tax rate | -% - 0.90% | 0.45% |
| Cost of debt | 7.00% - 12.50% | 9.75% |
| WACC | 6.1% - 9.7% | 7.9% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 4.7% | 5.7% |
| Adjusted beta | 0.6 | 0.93 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.00% | 9.50% |
| Tax rate | -% | 0.90% |
| Debt/Equity ratio | 0.08 | 0.08 |
| Cost of debt | 7.00% | 12.50% |
| After-tax WACC | 6.1% | 9.7% |
| Selected WACC | 7.9% | |
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 GRA.V:
cost_of_equity (7.75%) = risk_free_rate (3.45%) + equity_risk_premium (5.20%) * adjusted_beta (0.6) + 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.