VQS.TO WACC - Weighted Average Cost of Capital

The WACC of Viq Solutions Inc (VQS.TO) is 8.4%.

The Cost of Equity of Viq Solutions Inc (VQS.TO) is 8.50%.

The Cost of Debt of Viq Solutions Inc (VQS.TO) is 8.85%.

	Range	Selected
Cost of equity	6.70% - 10.30%	8.50%
Tax rate	3.50% - 5.60%	4.55%
Cost of debt	7.00% - 10.70%	8.85%
WACC	6.7% - 10.1%	8.4%

WACC

VQS.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.7	1

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.70%	10.30%

Tax rate	3.50%	5.60%
Debt/Equity ratio	2.52	2.52
Cost of debt	7.00%	10.70%

After-tax WACC	6.7%	10.1%


Selected WACC	8.4%

VQS.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 VQS.TO:

cost_of_equity (8.50%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.7) + 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.