The WACC of Polydex Pharmaceuticals Ltd (POLXF) is 5.9%.
Range | Selected | |
Cost of equity | 5.3% - 6.7% | 6% |
Tax rate | 4.5% - 12.9% | 8.7% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 5.3% - 6.6% | 5.9% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 4.6% | 5.6% |
Adjusted beta | 0.32 | 0.33 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 5.3% | 6.7% |
Tax rate | 4.5% | 12.9% |
Debt/Equity ratio | 0.06 | 0.06 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 5.3% | 6.6% |
Selected WACC | 5.9% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
POLXF | Polydex Pharmaceuticals Ltd | 0.06 | 0.93 | 0.87 |
BIO.CN | Biome Grow Inc | 7.45 | -0.25 | -0.03 |
CHM.CN | Chemistree Technology Inc | 2.06 | -0.31 | -0.11 |
IPCI.TO | Intellipharmaceutics International Inc | 1.06 | -0.25 | -0.12 |
KOAN | Resonate Blends Inc | 27.07 | 0.88 | 0.03 |
MPXI.CN | MPX International Corp | 27.06 | 0 | 0 |
THC.CN | THC Biomed Intl Ltd | 2.74 | -0.29 | -0.08 |
TRGM | Targeted Medical Pharma Inc | 175378.94 | 0.7 | 0 |
ULUR | ULURU Inc | 0.09 | 1.62 | 1.49 |
Low | High | |
Unlevered beta | -0.03 | 0 |
Relevered beta | -0.01 | 0 |
Adjusted relevered beta | 0.32 | 0.33 |
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 POLXF:
cost_of_equity (6.00%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.32) + 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.