The WACC of Wavefront Technology Solutions Inc (WEE.V) is 5.6%.
Range | Selected | |
Cost of equity | 5.1% - 7.0% | 6.05% |
Tax rate | 26.2% - 27.0% | 26.6% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 4.8% - 6.3% | 5.6% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 5.1% | 6.1% |
Adjusted beta | 0.25 | 0.35 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 5.1% | 7.0% |
Tax rate | 26.2% | 27.0% |
Debt/Equity ratio | 0.27 | 0.27 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 4.8% | 6.3% |
Selected WACC | 5.6% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
WEE.V | Wavefront Technology Solutions Inc | 0.27 | 0.79 | 0.66 |
EXTN | Exterran Corp | 3.74 | 0.27 | 0.07 |
HE.TO | Hanwei Energy Services Corp | 1.24 | -0.01 | 0 |
IRIG | Integrated Drilling Equipment Holdings Corp | 4469239.5 | 0.03 | 0 |
PFIE | Profire Energy Inc | 0 | -0.25 | -0.25 |
QSEP | QS Energy Inc | 0.02 | -0.4 | -0.39 |
RCON | Recon Technology Ltd | 0.05 | 0.72 | 0.69 |
RPC.V | Raise Production Inc | 0.62 | 0.37 | 0.25 |
SDPI | Superior Drilling Products Inc | 0.2 | -0.37 | -0.33 |
SENS.CN | Sensor Technologies Corp | 0.06 | -0.93 | -0.89 |
Low | High | |
Unlevered beta | -0.1 | 0.03 |
Relevered beta | -0.12 | 0.03 |
Adjusted relevered beta | 0.25 | 0.35 |
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 WEE.V:
cost_of_equity (6.05%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (0.25) + 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.