NPK.TO WACC - Weighted Average Cost of Capital

The WACC of Verde Agritech PLC (NPK.TO) is 8.1%.

The Cost of Equity of Verde Agritech PLC (NPK.TO) is 6.85%.

The Cost of Debt of Verde Agritech PLC (NPK.TO) is 12.65%.

	Range	Selected
Cost of equity	4.70% - 9.00%	6.85%
Tax rate	17.70% - 24.60%	21.15%
Cost of debt	4.10% - 21.20%	12.65%
WACC	4.1% - 12.2%	8.1%

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	0.31	0.79

Additional risk adjustments	0.0%	0.5%
Cost of equity	4.70%	9.00%

Tax rate	17.70%	24.60%
Debt/Equity ratio	0.82	0.82
Cost of debt	4.10%	21.20%

After-tax WACC	4.1%	12.2%


Selected WACC	8.1%

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 (6.85%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.31) + 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.