ITP.TO WACC - Weighted Average Cost of Capital

The WACC of Intertape Polymer Group Inc (ITP.TO) is 6.2%.

The Cost of Equity of Intertape Polymer Group Inc (ITP.TO) is 6.75%.

The Cost of Debt of Intertape Polymer Group Inc (ITP.TO) is 5.60%.

	Range	Selected
Cost of equity	5.60% - 7.90%	6.75%
Tax rate	19.30% - 22.60%	20.95%
Cost of debt	5.50% - 5.70%	5.60%
WACC	5.3% - 7.1%	6.2%

WACC

ITP.TO WACC calculation

Category	Low	High

Long-term bond rate	3.4%	3.9%
Equity market risk premium	4.7%	5.7%
Adjusted beta	0.47	0.61

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.60%	7.90%

Tax rate	19.30%	22.60%
Debt/Equity ratio	0.3	0.3
Cost of debt	5.50%	5.70%

After-tax WACC	5.3%	7.1%


Selected WACC	6.2%

ITP.TO'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 ITP.TO:

cost_of_equity (6.75%) = risk_free_rate (3.65%) + equity_risk_premium (5.20%) * adjusted_beta (0.47) + 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.