NPK.TO WACC - Weighted Average Cost of Capital

The WACC of Verde Agritech PLC (NPK.TO) is 8.6%.

The Cost of Equity of Verde Agritech PLC (NPK.TO) is 7.65%.

The Cost of Debt of Verde Agritech PLC (NPK.TO) is 11.35%.

	Range	Selected
Cost of equity	5.40% - 9.90%	7.65%
Tax rate	7.80% - 16.10%	11.95%
Cost of debt	4.00% - 18.70%	11.35%
WACC	4.7% - 12.5%	8.6%

WACC

NPK.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.45	0.95

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.40%	9.90%

Tax rate	7.80%	16.10%
Debt/Equity ratio	0.8	0.8
Cost of debt	4.00%	18.70%

After-tax WACC	4.7%	12.5%


Selected WACC	8.6%

NPK.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 NPK.TO:

cost_of_equity (7.65%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.45) + 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.