NPK.TO WACC - Weighted Average Cost of Capital

The WACC of Verde Agritech PLC (NPK.TO) is 11.4%.

The Cost of Equity of Verde Agritech PLC (NPK.TO) is 9.15%.

The Cost of Debt of Verde Agritech PLC (NPK.TO) is 16.45%.

	Range	Selected
Cost of equity	7.70% - 10.60%	9.15%
Tax rate	17.70% - 24.60%	21.15%
Cost of debt	11.70% - 21.20%	16.45%
WACC	8.9% - 13.9%	11.4%

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	0.9	1.05

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.70%	10.60%

Tax rate	17.70%	24.60%
Debt/Equity ratio	1.61	1.61
Cost of debt	11.70%	21.20%

After-tax WACC	8.9%	13.9%


Selected WACC	11.4%

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 (9.15%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.9) + 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.