WTE.TO WACC - Weighted Average Cost of Capital

The WACC of Westshore Terminals Investment Corp (WTE.TO) is 7.3%.

The Cost of Equity of Westshore Terminals Investment Corp (WTE.TO) is 8.45%.

The Cost of Debt of Westshore Terminals Investment Corp (WTE.TO) is 4.30%.

	Range	Selected
Cost of equity	7.00% - 9.90%	8.45%
Tax rate	27.00% - 27.00%	27.00%
Cost of debt	4.10% - 4.50%	4.30%
WACC	6.2% - 8.5%	7.3%

WACC

WTE.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.76	0.94

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.00%	9.90%

Tax rate	27.00%	27.00%
Debt/Equity ratio	0.26	0.26
Cost of debt	4.10%	4.50%

After-tax WACC	6.2%	8.5%


Selected WACC	7.3%

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 (8.45%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.76) + 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.