PTS.TO WACC - Weighted Average Cost of Capital
The WACC of Points International Ltd (PTS.TO) is 7.5%.
| Range | Selected | |
| Cost of equity | 6.3% - 8.7% | 7.5% |
| Tax rate | 25.9% - 29.3% | 27.6% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 6.3% - 8.7% | 7.5% |
| Category | Low | High |
| Long-term bond rate | 3.4% | 3.9% |
| Equity market risk premium | 4.7% | 5.7% |
| Adjusted beta | 0.62 | 0.76 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.3% | 8.7% |
| Tax rate | 25.9% | 29.3% |
| Debt/Equity ratio | 0 | 0 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 6.3% | 8.7% |
| Selected WACC | 7.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| PTS.TO | Points International Ltd | 0 | 1.62 | 1.62 |
| DADA | Dada Nexus Ltd | 0.88 | 0.38 | 0.23 |
| FOOD.TO | Goodfood Market Corp | 4.33 | 1.61 | 0.39 |
| IMBI | iMedia Brands Inc | 55.57 | 2.14 | 0.05 |
| KITS.TO | Kits Eyecare Ltd | 0.03 | 1.13 | 1.1 |
| LITB | LightInTheBox Holding Co Ltd | 0.92 | -1.28 | -0.77 |
| MOHO | Ecmoho Ltd | 1.23 | 0.93 | 0.5 |
| RUHN | Ruhnn Holding Ltd | 0.01 | 1.07 | 1.07 |
| SECO | Secoo Holding Ltd | 58.33 | -2.46 | -0.06 |
| UXIN | Uxin Ltd | 0.13 | 1.18 | 1.07 |
| Low | High | |
| Unlevered beta | 0.33 | 0.72 |
| Relevered beta | 0.43 | 0.64 |
| Adjusted relevered beta | 0.62 | 0.76 |
PTS.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 PTS.TO:
cost_of_equity (7.50%) = risk_free_rate (3.65%) + equity_risk_premium (5.20%) * adjusted_beta (0.62) + 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.