NVCN.TO WACC - Weighted Average Cost of Capital
The WACC of Neovasc Inc (NVCN.TO) is 5.9%.
| Range | Selected | |
| Cost of equity | 4.8% - 7.0% | 5.9% |
| Tax rate | 0.1% - 0.2% | 0.15% |
| Cost of debt | 4.0% - 7.0% | 5.5% |
| WACC | 4.7% - 7.0% | 5.9% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.33 | 0.47 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 4.8% | 7.0% |
| Tax rate | 0.1% | 0.2% |
| Debt/Equity ratio | 0.13 | 0.13 |
| Cost of debt | 4.0% | 7.0% |
| After-tax WACC | 4.7% | 7.0% |
| Selected WACC | 5.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| NVCN.TO | Neovasc Inc | 0.13 | 1.98 | 1.76 |
| ALRT | ALR Technologies Inc | 2.01 | 0.49 | 0.16 |
| DXR | Daxor Corp | 0.02 | 0.23 | 0.22 |
| HJLI | Hancock Jaffe Laboratories Inc | 0 | 1.41 | 1.41 |
| IDL.V | Imaging Dynamics Co Ltd | 15.26 | 0.66 | 0.04 |
| IGAP | Integrity Applications Inc | 0 | -1.66 | -1.65 |
| LLIT | Lianluo Smart Ltd | 0.05 | -0.06 | -0.06 |
| OBLN | Obalon Therapeutics Inc | 0.01 | -1.24 | -1.23 |
| TLT.V | Theralase Technologies Inc | 0.01 | -0.3 | -0.3 |
| VPT.V | VentriPoint Diagnostics Ltd | 0.07 | 0.23 | 0.22 |
| Low | High | |
| Unlevered beta | 0 | 0.19 |
| Relevered beta | 0 | 0.21 |
| Adjusted relevered beta | 0.33 | 0.47 |
NVCN.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 NVCN.TO:
cost_of_equity (5.90%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.33) + 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.