LPEN.TO WACC - Weighted Average Cost of Capital
The WACC of Loop Energy Inc (LPEN.TO) is 6.0%.
| Range | Selected | |
| Cost of equity | 18.5% - 26.4% | 22.45% |
| Tax rate | 25.9% - 26.5% | 26.2% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.6% - 6.5% | 6.0% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 3.01 | 3.64 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 18.5% | 26.4% |
| Tax rate | 25.9% | 26.5% |
| Debt/Equity ratio | 6.96 | 6.96 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.6% | 6.5% |
| Selected WACC | 6.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| LPEN.TO | Loop Energy Inc | 6.96 | 1.78 | 0.29 |
| BLDP.TO | Ballard Power Systems Inc | 0.06 | 0.98 | 0.94 |
| CTO.V | Circa Enterprises Inc | 0.33 | 1.35 | 1.09 |
| EFL.TO | Electrovaya Inc | 0.13 | 0.76 | 0.69 |
| EGT.V | Eguana Technologies Inc | 8.36 | -1.02 | -0.14 |
| HMM.A.TO | Hammond Manufacturing Company Ltd | 0.53 | 0.87 | 0.63 |
| NHHH.V | FuelPositive Corp | 0.03 | 0.9 | 0.88 |
| Low | High | |
| Unlevered beta | 0.66 | 0.81 |
| Relevered beta | 4 | 4.94 |
| Adjusted relevered beta | 3.01 | 3.64 |
LPEN.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 LPEN.TO:
cost_of_equity (22.45%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (3.01) + 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.