ISFT.CN WACC - Weighted Average Cost of Capital

The WACC of ICEsoft Technologies Canada Corp (ISFT.CN) is 5.1%.

The Cost of Equity of ICEsoft Technologies Canada Corp (ISFT.CN) is 5.50%.

The Cost of Debt of ICEsoft Technologies Canada Corp (ISFT.CN) is 5.50%.

	Range	Selected
Cost of equity	4.80% - 6.20%	5.50%
Tax rate	25.90% - 26.50%	26.20%
Cost of debt	4.00% - 7.00%	5.50%
WACC	4.3% - 5.9%	5.1%

WACC

ISFT.CN WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.32	0.33

Additional risk adjustments	0.0%	0.5%
Cost of equity	4.80%	6.20%

Tax rate	25.90%	26.50%
Debt/Equity ratio	0.4	0.4
Cost of debt	4.00%	7.00%

After-tax WACC	4.3%	5.9%


Selected WACC	5.1%

ISFT.CN'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 ISFT.CN:

cost_of_equity (5.50%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.32) + 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.