WPRT.TO
Westport Fuel Systems Inc
Price:  
3.94 
CAD
Volume:  
10,602.00
Canada | Machinery
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WPRT.TO WACC - Weighted Average Cost of Capital

The WACC of Westport Fuel Systems Inc (WPRT.TO) is 7.4%.

The Cost of Equity of Westport Fuel Systems Inc (WPRT.TO) is 9.05%.
The Cost of Debt of Westport Fuel Systems Inc (WPRT.TO) is 5.65%.

Range Selected
Cost of equity 7.40% - 10.70% 9.05%
Tax rate 16.00% - 26.10% 21.05%
Cost of debt 4.30% - 7.00% 5.65%
WACC 6.1% - 8.8% 7.4%
WACC

WPRT.TO WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.83 1.07
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.40% 10.70%
Tax rate 16.00% 26.10%
Debt/Equity ratio 0.53 0.53
Cost of debt 4.30% 7.00%
After-tax WACC 6.1% 8.8%
Selected WACC 7.4%

WPRT.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 WPRT.TO:

cost_of_equity (9.05%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.83) + 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.