OTIVF WACC - Weighted Average Cost of Capital
The WACC of On Track Innovations Ltd (OTIVF) is 9.0%.
| Range | Selected | |
| Cost of equity | 7.8% - 12.9% | 10.35% |
| Tax rate | 1.3% - 3.4% | 2.35% |
| Cost of debt | 7.0% - 10.2% | 8.6% |
| WACC | 7.2% - 10.9% | 9.0% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 4.2% | 5.2% |
| Adjusted beta | 1.09 | 1.66 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.8% | 12.9% |
| Tax rate | 1.3% | 3.4% |
| Debt/Equity ratio | 1.95 | 1.95 |
| Cost of debt | 7.0% | 10.2% |
| After-tax WACC | 7.2% | 10.9% |
| Selected WACC | 9.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| OTIVF | On Track Innovations Ltd | 1.95 | 0.81 | 0.28 |
| ALOT | AstroNova Inc | 0.66 | 0.69 | 0.42 |
| GPTX | Global Payment Technologies Inc | 50906.73 | 0 | 0 |
| IGOI | iGO Inc | 0.92 | 0.89 | 0.47 |
| IINX | Ionix Technology Inc | 78.16 | 179.7 | 2.32 |
| JRVS | iMine Corp | 0.01 | 3.55 | 3.49 |
| SCKT | Socket Mobile Inc | 0.43 | 0.84 | 0.59 |
| TTD.V | Tinkerine Studios Ltd | 0.37 | 0.97 | 0.71 |
| VIDE | Video Display Corp | 1215.42 | -0.69 | 0 |
| Low | High | |
| Unlevered beta | 0.43 | 0.57 |
| Relevered beta | 1.13 | 1.99 |
| Adjusted relevered beta | 1.09 | 1.66 |
OTIVF'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 OTIVF:
cost_of_equity (10.35%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (1.09) + 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.