The WACC of Voip-Pal.Com Inc (VPLM) is 5.3%.
Range | Selected | |
Cost of equity | 6.0% - 8.0% | 7% |
Tax rate | 26.2% - 27.0% | 26.6% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 4.8% - 5.8% | 5.3% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 4.6% | 5.6% |
Adjusted beta | 0.46 | 0.57 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 6.0% | 8.0% |
Tax rate | 26.2% | 27.0% |
Debt/Equity ratio | 1 | 1 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 4.8% | 5.8% |
Selected WACC | 5.3% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
VPLM | Voip-Pal.Com Inc | 1.05 | 0.54 | 0.31 |
ABWN | Airborne Wireless Network | 200.76 | 0 | 0 |
DTGI | Digerati Technologies Inc | 28.47 | 0.95 | 0.04 |
FUIG | Fusion Interactive Corp | 1053.12 | 0 | 0 |
GSAT | Globalstar Inc | 0.17 | 1.68 | 1.5 |
ORBC | ORBCOMM Inc | 0.24 | 1.57 | 1.33 |
PVSP | Pervasip Corp | 4.16 | 0.86 | 0.21 |
SIFY | Sify Technologies Ltd | 1.03 | 0.27 | 0.16 |
TGO.TO | Terago Inc | 1.77 | 0.46 | 0.2 |
VG | Vonage Holdings Corp | 0.78 | 2.04 | 1.3 |
Low | High | |
Unlevered beta | 0.18 | 0.25 |
Relevered beta | 0.19 | 0.36 |
Adjusted relevered beta | 0.46 | 0.57 |
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 VPLM:
cost_of_equity (7.00%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.46) + 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.