NSTR.TA WACC - Weighted Average Cost of Capital

The WACC of Norstar Holdings Inc (NSTR.TA) is 9.1%.

The Cost of Equity of Norstar Holdings Inc (NSTR.TA) is 51.95%.

The Cost of Debt of Norstar Holdings Inc (NSTR.TA) is 10.30%.

	Range	Selected
Cost of equity	42.80% - 61.10%	51.95%
Tax rate	16.40% - 27.40%	21.90%
Cost of debt	4.00% - 16.60%	10.30%
WACC	4.6% - 13.6%	9.1%

WACC

NSTR.TA WACC calculation

Category	Low	High

Long-term bond rate	4.8%	5.3%
Equity market risk premium	6.1%	7.1%
Adjusted beta	6.19	7.76

Additional risk adjustments	0.0%	0.5%
Cost of equity	42.80%	61.10%

Tax rate	16.40%	27.40%
Debt/Equity ratio	31.14	31.14
Cost of debt	4.00%	16.60%

After-tax WACC	4.6%	13.6%


Selected WACC	9.1%

NSTR.TA'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 NSTR.TA:

cost_of_equity (51.95%) = risk_free_rate (5.05%) + equity_risk_premium (6.60%) * adjusted_beta (6.19) + 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.