KPT.TO
KP Tissue Inc
Price:  
9.25 
CAD
Volume:  
13,981
Canada | Household Products

KPT.TO WACC - Weighted Average Cost of Capital

The WACC of KP Tissue Inc (KPT.TO) is 5.4%.

The Cost of Equity of KP Tissue Inc (KPT.TO) is 7%.
The Cost of Debt of KP Tissue Inc (KPT.TO) is 5%.

RangeSelected
Cost of equity5.4% - 8.6%7%
Tax rate25.9% - 26.5%26.2%
Cost of debt5.0% - 5.0%5%
WACC4.6% - 6.2%5.4%
WACC

KPT.TO WACC calculation

CategoryLowHigh
Long-term bond rate3.2%3.7%
Equity market risk premium5.1%6.1%
Adjusted beta0.440.73
Additional risk adjustments0.0%0.5%
Cost of equity5.4%8.6%
Tax rate25.9%26.5%
Debt/Equity ratio
11
Cost of debt5.0%5.0%
After-tax WACC4.6%6.2%
Selected WACC5.4%

KPT.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 KPT.TO:

cost_of_equity (7.00%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.44) + 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.