VCM.TO WACC - Weighted Average Cost of Capital
The WACC of Vecima Networks Inc (VCM.TO) is 8.4%.
| Range | Selected | |
| Cost of equity | 7.8% - 10.6% | 9.2% |
| Tax rate | 16.9% - 20.2% | 18.55% |
| Cost of debt | 5.4% - 8.3% | 6.85% |
| WACC | 7.1% - 9.7% | 8.4% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.91 | 1.06 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.8% | 10.6% |
| Tax rate | 16.9% | 20.2% |
| Debt/Equity ratio | 0.28 | 0.28 |
| Cost of debt | 5.4% | 8.3% |
| After-tax WACC | 7.1% | 9.7% |
| Selected WACC | 8.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| VCM.TO | Vecima Networks Inc | 0.28 | 0.65 | 0.53 |
| CLFD | Clearfield Inc | 0.01 | 1.25 | 1.24 |
| CMI.V | C-Com Satellite Systems Inc | 0.04 | 0.93 | 0.9 |
| GNSS | Genasys Inc | 0.13 | 1.6 | 1.45 |
| LTRX | Lantronix Inc | 0.2 | 0.6 | 0.51 |
| OCC | Optical Cable Corp | 0.45 | 1.2 | 0.88 |
| PCTI | PCTEL Inc | 0 | -0.35 | -0.35 |
| PRKR | ParkerVision Inc | 0.81 | 0.91 | 0.55 |
| STC.V | Sangoma Technologies Corp | 0.18 | 1.3 | 1.13 |
| YTY.V | Wi2wi Corp | 0.98 | 1.44 | 0.8 |
| Low | High | |
| Unlevered beta | 0.7 | 0.89 |
| Relevered beta | 0.87 | 1.09 |
| Adjusted relevered beta | 0.91 | 1.06 |
VCM.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 VCM.TO:
cost_of_equity (9.20%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.91) + 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.