PFSF WACC - Weighted Average Cost of Capital
The WACC of Pacific Software Inc (PFSF) is 5.6%.
| Range | Selected | |
| Cost of equity | 5.4% - 9.5% | 7.45% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 4.5% - 6.6% | 5.6% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.33 | 0.83 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.4% | 9.5% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 4.5% | 6.6% |
| Selected WACC | 5.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| PFSF | Pacific Software Inc | 1.18 | -3.29 | -1.77 |
| AXE.V | Acceleware Ltd | 0.2 | -0.74 | -0.65 |
| BLBX | Blackboxstocks Inc | 0.02 | 1.39 | 1.38 |
| INTV | Integrated Ventures Inc | 0.32 | -0.09 | -0.07 |
| IOTC | Iota Communications Inc | 202.21 | -0.75 | -0.01 |
| ISDR | Issuer Direct Corp | 0.54 | 0.96 | 0.69 |
| MBLV | Globex Holdings Corp | 15719.63 | 1.18 | 0 |
| MFH | Mercurity Fintech Holding Inc | 0.02 | 1.21 | 1.19 |
| MVP.V | MediaValet Inc | 0.03 | 0.58 | 0.56 |
| VENZ.V | Venzee Technologies Inc | 0.23 | 0.41 | 0.35 |
| VSBY.CN | VSBLTY Groupe Technologies Corp | 0.15 | -0.81 | -0.73 |
| Low | High | |
| Unlevered beta | -0.01 | 0.35 |
| Relevered beta | 0 | 0.75 |
| Adjusted relevered beta | 0.33 | 0.83 |
PFSF'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 PFSF:
cost_of_equity (7.45%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * 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.