WTE.TO WACC - Weighted Average Cost of Capital
The WACC of Westshore Terminals Investment Corp (WTE.TO) is 7.4%.
| Range | Selected | |
| Cost of equity | 7.1% - 9.9% | 8.5% |
| Tax rate | 27.0% - 27.0% | 27% |
| Cost of debt | 4.1% - 4.5% | 4.3% |
| WACC | 6.3% - 8.5% | 7.4% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.78 | 0.93 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.1% | 9.9% |
| Tax rate | 27.0% | 27.0% |
| Debt/Equity ratio | 0.26 | 0.26 |
| Cost of debt | 4.1% | 4.5% |
| After-tax WACC | 6.3% | 8.5% |
| Selected WACC | 7.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| WTE.TO | Westshore Terminals Investment Corp | 0.26 | 0.61 | 0.51 |
| LGT.B.TO | Logistec Corp | 0.48 | -0.4 | -0.3 |
| LPG | Dorian LPG Ltd | 0.45 | 1.16 | 0.87 |
| MIC | Macquarie Infrastructure Corp | 0.27 | 1.28 | 1.07 |
| PBFX | PBF Logistics LP | 0.5 | 1.27 | 0.93 |
| SINO | Sino-Global Shipping America Ltd | 0 | 0.28 | 0.28 |
| XCT.TO | ExactEarth Ltd | 0.07 | 1.01 | 0.96 |
| GLPR.L | Global Ports Investments PLC | 1.54 | 1.45 | 0.68 |
| PPA.AT | Piraeus Port Authority SA | 0.07 | 0.64 | 0.61 |
| TSM1T.TL | Tallinna Sadam AS | 0.59 | 0.2 | 0.14 |
| Low | High | |
| Unlevered beta | 0.57 | 0.76 |
| Relevered beta | 0.67 | 0.9 |
| Adjusted relevered beta | 0.78 | 0.93 |
WTE.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 WTE.TO:
cost_of_equity (8.50%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.78) + 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.