NXJ.TO WACC - Weighted Average Cost of Capital

The WACC of Nexj Systems Inc (NXJ.TO) is 5.9%.

The Cost of Equity of Nexj Systems Inc (NXJ.TO) is 6.10%.

The Cost of Debt of Nexj Systems Inc (NXJ.TO) is 5.50%.

	Range	Selected
Cost of equity	4.90% - 7.30%	6.10%
Tax rate	25.90% - 26.50%	26.20%
Cost of debt	4.00% - 7.00%	5.50%
WACC	4.8% - 7.1%	5.9%

WACC

NXJ.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.35	0.52

Additional risk adjustments	0.0%	0.5%
Cost of equity	4.90%	7.30%

Tax rate	25.90%	26.50%
Debt/Equity ratio	0.11	0.11
Cost of debt	4.00%	7.00%

After-tax WACC	4.8%	7.1%


Selected WACC	5.9%

NXJ.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 NXJ.TO:

cost_of_equity (6.10%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.35) + 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.