NOA.TO WACC - Weighted Average Cost of Capital

The WACC of North American Construction Group Ltd (NOA.TO) is 9.6%.

The Cost of Equity of North American Construction Group Ltd (NOA.TO) is 12.35%.

The Cost of Debt of North American Construction Group Ltd (NOA.TO) is 9.30%.

	Range	Selected
Cost of equity	10.40% - 14.30%	12.35%
Tax rate	19.60% - 22.80%	21.20%
Cost of debt	6.90% - 11.70%	9.30%
WACC	7.8% - 11.5%	9.6%

WACC

NOA.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	1.41	1.66

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.40%	14.30%

Tax rate	19.60%	22.80%
Debt/Equity ratio	1.16	1.16
Cost of debt	6.90%	11.70%

After-tax WACC	7.8%	11.5%


Selected WACC	9.6%

NOA.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 NOA.TO:

cost_of_equity (12.35%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.41) + 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.