KPT.TO WACC - Weighted Average Cost of Capital
The WACC of KP Tissue Inc (KPT.TO) is 5.4%.
| Range | Selected | |
| Cost of equity | 5.5% - 8.9% | 7.2% |
| Tax rate | 25.9% - 26.5% | 26.2% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 4.6% - 6.3% | 5.4% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.46 | 0.77 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.5% | 8.9% |
| Tax rate | 25.9% | 26.5% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 4.6% | 6.3% |
| Selected WACC | 5.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| KPT.TO | KP Tissue Inc | 0.95 | 0.34 | 0.2 |
| CENT | Central Garden & Pet Co | 0.47 | 0.39 | 0.29 |
| CHD | Church & Dwight Co Inc | 0.09 | 0.01 | 0.01 |
| ENR | Energizer Holdings Inc | 1.95 | 0.42 | 0.17 |
| OBCI | Ocean Bio-Chem Inc | 0.07 | -0.24 | -0.23 |
| ODC | Oil-Dri Corporation of America | 0.06 | 0.54 | 0.52 |
| OGEN | Oragenics Inc | 0.3 | 1.96 | 1.6 |
| PURE | PURE Biosciences Inc | 0.31 | -0.91 | -0.74 |
| SONA.CN | Sona Nanotech Inc | 0.01 | 1.15 | 1.14 |
| SPB | Spectrum Brands Holdings Inc | 0.39 | 0.91 | 0.71 |
| WDFC | WD-40 Co | 0.03 | -0.05 | -0.05 |
| Low | High | |
| Unlevered beta | 0.17 | 0.29 |
| Relevered beta | 0.19 | 0.66 |
| Adjusted relevered beta | 0.46 | 0.77 |
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 (7.20%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.46) + 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.