VNP.TO
5N Plus Inc
Price:  
8.81 
CAD
Volume:  
406,640.00
Canada | Chemicals
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VNP.TO WACC - Weighted Average Cost of Capital

The WACC of 5N Plus Inc (VNP.TO) is 7.9%.

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 6.9% - 8.9% 7.9%
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 0.93 1.06
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.90% 10.60%
Tax rate 33.00% 48.50%
Debt/Equity ratio 0.26 0.26
Cost of debt 4.40% 4.90%
After-tax WACC 6.9% 8.9%
Selected WACC 7.9%

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 (0.93) + 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.