PBIT.CN WACC - Weighted Average Cost of Capital

The WACC of POSaBIT Systems Corp (PBIT.CN) is 16.5%.

The Cost of Equity of POSaBIT Systems Corp (PBIT.CN) is 7.20%.

The Cost of Debt of POSaBIT Systems Corp (PBIT.CN) is 31.55%.

	Range	Selected
Cost of equity	5.40% - 9.00%	7.20%
Tax rate	0.10% - 0.80%	0.45%
Cost of debt	7.00% - 56.10%	31.55%
WACC	6.0% - 26.9%	16.5%

WACC

PBIT.CN 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	0.71

Additional risk adjustments	0.5%	1.0%
Cost of equity	5.40%	9.00%

Tax rate	0.10%	0.80%
Debt/Equity ratio	0.62	0.62
Cost of debt	7.00%	56.10%

After-tax WACC	6.0%	26.9%


Selected WACC	16.5%

PBIT.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 PBIT.CN:

cost_of_equity (7.20%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.35) + risk_adjustments (0.75%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.