XTC.TO WACC - Weighted Average Cost of Capital

The WACC of Exco Technologies Ltd (XTC.TO) is 7.3%.

The Cost of Equity of Exco Technologies Ltd (XTC.TO) is 7.05%.

The Cost of Debt of Exco Technologies Ltd (XTC.TO) is 10.25%.

	Range	Selected
Cost of equity	5.70% - 8.40%	7.05%
Tax rate	22.70% - 24.10%	23.40%
Cost of debt	4.20% - 16.30%	10.25%
WACC	5.0% - 9.6%	7.3%

WACC

XTC.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.5	0.7

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.70%	8.40%

Tax rate	22.70%	24.10%
Debt/Equity ratio	0.45	0.45
Cost of debt	4.20%	16.30%

After-tax WACC	5.0%	9.6%


Selected WACC	7.3%

XTC.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 XTC.TO:

cost_of_equity (7.05%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.5) + 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.