VCM.TO
Vecima Networks Inc
Price:  
10.71 
CAD
Volume:  
2,520.00
Canada | Communications Equipment
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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.