PHO.TO
Photon Control Inc
Price:  
3.60 
CAD
Volume:  
253,210.00
Canada | Electronic Equipment, Instruments & Components
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PHO.TO WACC - Weighted Average Cost of Capital

The WACC of Photon Control Inc (PHO.TO) is 8.6%.

The Cost of Equity of Photon Control Inc (PHO.TO) is 8.65%.
The Cost of Debt of Photon Control Inc (PHO.TO) is 4.25%.

Range Selected
Cost of equity 6.90% - 10.40% 8.65%
Tax rate 30.20% - 31.30% 30.75%
Cost of debt 4.00% - 4.50% 4.25%
WACC 6.8% - 10.4% 8.6%
WACC

PHO.TO WACC calculation

Category Low High
Long-term bond rate 3.4% 3.9%
Equity market risk premium 4.7% 5.7%
Adjusted beta 0.74 1.06
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.90% 10.40%
Tax rate 30.20% 31.30%
Debt/Equity ratio 0 0
Cost of debt 4.00% 4.50%
After-tax WACC 6.8% 10.4%
Selected WACC 8.6%

PHO.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 PHO.TO:

cost_of_equity (8.65%) = risk_free_rate (3.65%) + equity_risk_premium (5.20%) * adjusted_beta (0.74) + 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.