VCM.TO WACC - Weighted Average Cost of Capital

The WACC of Vecima Networks Inc (VCM.TO) is 8.9%.

The Cost of Equity of Vecima Networks Inc (VCM.TO) is 9.50%.

The Cost of Debt of Vecima Networks Inc (VCM.TO) is 8.35%.

	Range	Selected
Cost of equity	8.00% - 11.00%	9.50%
Tax rate	16.90% - 20.20%	18.55%
Cost of debt	8.30% - 8.40%	8.35%
WACC	7.8% - 10.1%	8.9%

WACC

VCM.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.95	1.13

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.00%	11.00%

Tax rate	16.90%	20.20%
Debt/Equity ratio	0.27	0.27
Cost of debt	8.30%	8.40%

After-tax WACC	7.8%	10.1%


Selected WACC	8.9%

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 (9.50%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.95) + 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.