PRMW.TO WACC - Weighted Average Cost of Capital
The WACC of Primo Water Corp (MISSISSAUGA) (PRMW.TO) is 5.9%.
| Range | Selected | |
| Cost of equity | 5.8% - 7.8% | 6.8% |
| Tax rate | 27.8% - 46.4% | 37.1% |
| Cost of debt | 4.0% - 5.0% | 4.5% |
| WACC | 5.2% - 6.6% | 5.9% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.53 | 0.59 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.8% | 7.8% |
| Tax rate | 27.8% | 46.4% |
| Debt/Equity ratio | 0.3 | 0.3 |
| Cost of debt | 4.0% | 5.0% |
| After-tax WACC | 5.2% | 6.6% |
| Selected WACC | 5.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| PRMW.TO | Primo Water Corp (MISSISSAUGA) | 0.3 | -0.25 | -0.21 |
| CELH | Celsius Holdings Inc | 0 | 0.41 | 0.41 |
| COKE | Coca-Cola Consolidated Inc | 0.18 | 0.31 | 0.27 |
| GHMP | Good Hemp Inc | 0.7 | 0.38 | 0.26 |
| JSDA | Jones Soda Co | 0.01 | 1.24 | 1.23 |
| MLHC | M Line Holdings Inc | 3102.72 | 0 | 0 |
| MOJO | MOJO Organics Inc | 0.01 | 0.44 | 0.44 |
| NBEV | Newage Inc | 2.3 | 1.41 | 0.54 |
| REED | Reed's Inc | 0.34 | 0.27 | 0.22 |
| TNY.CN | Tinley Beverage Company Inc | 0.37 | -0.54 | -0.43 |
| Low | High | |
| Unlevered beta | 0.24 | 0.33 |
| Relevered beta | 0.3 | 0.39 |
| Adjusted relevered beta | 0.53 | 0.59 |
PRMW.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 PRMW.TO:
cost_of_equity (6.80%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.53) + 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.