NEPT.TO WACC - Weighted Average Cost of Capital

The WACC of Neptune Wellness Solutions Inc (NEPT.TO) is 9.8%.

The Cost of Equity of Neptune Wellness Solutions Inc (NEPT.TO) is 8.15%.

The Cost of Debt of Neptune Wellness Solutions Inc (NEPT.TO) is 15.60%.

	Range	Selected
Cost of equity	6.50% - 9.80%	8.15%
Tax rate	25.90% - 26.50%	26.20%
Cost of debt	7.00% - 24.20%	15.60%
WACC	5.8% - 13.7%	9.8%

WACC

NEPT.TO WACC calculation

Category	Low	High

Long-term bond rate	3.6%	4.1%
Equity market risk premium	4.7%	5.7%
Adjusted beta	0.61	0.91

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.50%	9.80%

Tax rate	25.90%	26.50%
Debt/Equity ratio	0.94	0.94
Cost of debt	7.00%	24.20%

After-tax WACC	5.8%	13.7%


Selected WACC	9.8%

NEPT.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 NEPT.TO:

cost_of_equity (8.15%) = risk_free_rate (3.85%) + equity_risk_premium (5.20%) * adjusted_beta (0.61) + 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.