VNP.TO WACC - Weighted Average Cost of Capital

The WACC of 5N Plus Inc (VNP.TO) is 8.2%.

The Cost of Equity of 5N Plus Inc (VNP.TO) is 9.25%.

The Cost of Debt of 5N Plus Inc (VNP.TO) is 4.65%.

	Range	Selected
Cost of equity	7.90% - 10.60%	9.25%
Tax rate	33.00% - 48.50%	40.75%
Cost of debt	4.40% - 4.90%	4.65%
WACC	7.1% - 9.3%	8.2%

WACC

VNP.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.92	1.05

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.90%	10.60%

Tax rate	33.00%	48.50%
Debt/Equity ratio	0.2	0.2
Cost of debt	4.40%	4.90%

After-tax WACC	7.1%	9.3%


Selected WACC	8.2%

VNP.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 VNP.TO:

cost_of_equity (9.25%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.92) + 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.