ZDC.V WACC - Weighted Average Cost of Capital
The WACC of Zedcor Inc (ZDC.V) is 6.5%.
| Range | Selected | |
| Cost of equity | 5.6% - 7.4% | 6.5% |
| Tax rate | 0.5% - 2.4% | 1.45% |
| Cost of debt | 4.0% - 7.5% | 5.75% |
| WACC | 5.5% - 7.4% | 6.5% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.35 | 0.42 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.6% | 7.4% |
| Tax rate | 0.5% | 2.4% |
| Debt/Equity ratio | 0.08 | 0.08 |
| Cost of debt | 4.0% | 7.5% |
| After-tax WACC | 5.5% | 7.4% |
| Selected WACC | 6.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| ZDC.V | Zedcor Inc | 0.08 | 0.67 | 0.62 |
| BRY.TO | Bri-Chem Corp | 3.42 | 0.49 | 0.11 |
| CCOM | CCOM Group Inc | 0.38 | 0.34 | 0.25 |
| CHSH | Eatware Inc | 2.72 | -1.21 | -0.33 |
| CLWT | Euro Tech Holdings Company Ltd | 0.03 | 0.14 | 0.14 |
| E.TO | Enterprise Group Inc | 0.21 | 1.94 | 1.61 |
| ICAU.V | Intercontinental Gold and Metals Ltd | 2.93 | 0.14 | 0.04 |
| TXHG | TX Holdings Inc | 0.76 | -0.44 | -0.25 |
| VEND | Generation Next Franchise Brands Inc | 57425.9 | 0.18 | 0 |
| WGEI | WindGen Energy Inc | 890.44 | -0.17 | 0 |
| Low | High | |
| Unlevered beta | 0.02 | 0.12 |
| Relevered beta | 0.03 | 0.13 |
| Adjusted relevered beta | 0.35 | 0.42 |
ZDC.V'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 ZDC.V:
cost_of_equity (6.50%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (0.35) + 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.