NPK.TO WACC - Weighted Average Cost of Capital

The WACC of Verde Agritech PLC (NPK.TO) is 7.8%.

The Cost of Equity of Verde Agritech PLC (NPK.TO) is 7.00%.

The Cost of Debt of Verde Agritech PLC (NPK.TO) is 12.70%.

	Range	Selected
Cost of equity	4.80% - 9.20%	7.00%
Tax rate	17.70% - 24.60%	21.15%
Cost of debt	4.20% - 21.20%	12.70%
WACC	4.4% - 11.2%	7.8%

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	0.13	0.67

Additional risk adjustments	1.0%	1.5%
Cost of equity	4.80%	9.20%

Tax rate	17.70%	24.60%
Debt/Equity ratio	0.42	0.42
Cost of debt	4.20%	21.20%

After-tax WACC	4.4%	11.2%


Selected WACC	7.8%

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 (7.00%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.13) + risk_adjustments (1.25%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.