XRX.CN
XORTX Therapeutics Inc
Price:  
1.90 
CAD
Volume:  
111,400.00
Canada | N/A
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XRX.CN WACC - Weighted Average Cost of Capital

The WACC of XORTX Therapeutics Inc (XRX.CN) is 7.7%.

The Cost of Equity of XORTX Therapeutics Inc (XRX.CN) is 11.65%.
The Cost of Debt of XORTX Therapeutics Inc (XRX.CN) is 5.00%.

Range Selected
Cost of equity 10.00% - 13.30% 11.65%
Tax rate 26.50% - 26.50% 26.50%
Cost of debt 5.00% - 5.00% 5.00%
WACC 6.8% - 8.5% 7.7%
WACC

XRX.CN WACC calculation

Category Low High
Long-term bond rate 3.4% 3.9%
Equity market risk premium 4.7% 5.7%
Adjusted beta 1.39 1.56
Additional risk adjustments 0.0% 0.5%
Cost of equity 10.00% 13.30%
Tax rate 26.50% 26.50%
Debt/Equity ratio 1 1
Cost of debt 5.00% 5.00%
After-tax WACC 6.8% 8.5%
Selected WACC 7.7%

XRX.CN'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 XRX.CN:

cost_of_equity (11.65%) = risk_free_rate (3.65%) + equity_risk_premium (5.20%) * adjusted_beta (1.39) + 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.