XTC.TO
Exco Technologies Ltd
Price:  
6.29 
CAD
Volume:  
20,267.00
Canada | Auto Components
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XTC.TO WACC - Weighted Average Cost of Capital

The WACC of Exco Technologies Ltd (XTC.TO) is 7.4%.

The Cost of Equity of Exco Technologies Ltd (XTC.TO) is 7.20%.
The Cost of Debt of Exco Technologies Ltd (XTC.TO) is 10.25%.

Range Selected
Cost of equity 5.70% - 8.70% 7.20%
Tax rate 22.70% - 24.10% 23.40%
Cost of debt 4.20% - 16.30% 10.25%
WACC 4.9% - 9.8% 7.4%
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 0.74
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.70% 8.70%
Tax rate 22.70% 24.10%
Debt/Equity ratio 0.47 0.47
Cost of debt 4.20% 16.30%
After-tax WACC 4.9% 9.8%
Selected WACC 7.4%

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 (7.20%) = 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.