PIXY WACC - Weighted Average Cost of Capital
The WACC of ShiftPixy Inc (PIXY) is 7.3%.
| Range | Selected | |
| Cost of equity | 5.9% - 9.4% | 7.65% |
| Tax rate | 0.0% - 0.1% | 0.05% |
| Cost of debt | 7.0% - 7.0% | 7% |
| WACC | 6.5% - 8.2% | 7.3% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.45 | 0.81 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.9% | 9.4% |
| Tax rate | 0.0% | 0.1% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 7.0% | 7.0% |
| After-tax WACC | 6.5% | 8.2% |
| Selected WACC | 7.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| PIXY | ShiftPixy Inc | 1.14 | 2.73 | 1.28 |
| ASGN | ASGN Inc | 0.42 | 0.49 | 0.35 |
| ATIF | ATIF Holdings Ltd | 0.02 | -0.44 | -0.43 |
| CWL.TO | Caldwell Partners International Inc | 0.31 | -0.6 | -0.46 |
| MSI.TO | Morneau Shepell Inc | 0.25 | 0.71 | 0.57 |
| NSP | Insperity Inc | 0.15 | 0.68 | 0.59 |
| RCRT | Recruiter.Com Group Inc | 0.1 | -0.02 | -0.02 |
| STJO | St Joseph Inc | 0.17 | -1.09 | -0.93 |
| WSCO | Wall Street Media Co Inc | 0 | 0.38 | 0.37 |
| COM.MC | Catenon SA | 0.07 | 1.15 | 1.08 |
| MORE.AS | Morefield Group NV | 0.58 | 0.25 | 0.16 |
| Low | High | |
| Unlevered beta | 0.16 | 0.37 |
| Relevered beta | 0.18 | 0.72 |
| Adjusted relevered beta | 0.45 | 0.81 |
PIXY'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 PIXY:
cost_of_equity (7.65%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.45) + 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.