NPT.CN WACC - Weighted Average Cost of Capital

The WACC of Plaintree Systems Inc (NPT.CN) is 8.1%.

The Cost of Equity of Plaintree Systems Inc (NPT.CN) is 59.45%.

The Cost of Debt of Plaintree Systems Inc (NPT.CN) is 5.00%.

	Range	Selected
Cost of equity	34.00% - 84.90%	59.45%
Tax rate	0.90% - 2.90%	1.90%
Cost of debt	5.00% - 5.00%	5.00%
WACC	6.7% - 9.5%	8.1%

WACC

NPT.CN WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	6.06	13.24

Additional risk adjustments	0.0%	0.5%
Cost of equity	34.00%	84.90%

Tax rate	0.90%	2.90%
Debt/Equity ratio	16.15	16.15
Cost of debt	5.00%	5.00%

After-tax WACC	6.7%	9.5%


Selected WACC	8.1%

NPT.CN'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 NPT.CN:

cost_of_equity (59.45%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (6.06) + 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.