NAC.U.TO
Nextpoint Acquisition Corp
Price:  
3.50 
USD
Volume:  
4,050.00
Canada | N/A
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NAC.U.TO WACC - Weighted Average Cost of Capital

The WACC of Nextpoint Acquisition Corp (NAC.U.TO) is 6.2%.

The Cost of Equity of Nextpoint Acquisition Corp (NAC.U.TO) is 10.55%.
The Cost of Debt of Nextpoint Acquisition Corp (NAC.U.TO) is 5.00%.

Range Selected
Cost of equity 9.00% - 12.10% 10.55%
Tax rate 26.50% - 26.50% 26.50%
Cost of debt 5.00% - 5.00% 5.00%
WACC 5.7% - 6.8% 6.2%
WACC

NAC.U.TO WACC calculation

Category Low High
Long-term bond rate 3.4% 3.9%
Equity market risk premium 4.2% 5.2%
Adjusted beta 1.34 1.47
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.00% 12.10%
Tax rate 26.50% 26.50%
Debt/Equity ratio 1.7 1.7
Cost of debt 5.00% 5.00%
After-tax WACC 5.7% 6.8%
Selected WACC 6.2%

NAC.U.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 NAC.U.TO:

cost_of_equity (10.55%) = risk_free_rate (3.65%) + equity_risk_premium (4.70%) * adjusted_beta (1.34) + 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.