ACD.TO WACC - Weighted Average Cost of Capital

The WACC of Accord Financial Corp (ACD.TO) is 6.7%.

The Cost of Equity of Accord Financial Corp (ACD.TO) is 11.75%.

The Cost of Debt of Accord Financial Corp (ACD.TO) is 10.20%.

	Range	Selected
Cost of equity	8.50% - 15.00%	11.75%
Tax rate	31.80% - 40.00%	35.90%
Cost of debt	5.50% - 14.90%	10.20%
WACC	4.0% - 9.3%	6.7%

WACC

ACD.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	1.04	1.77

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.50%	15.00%

Tax rate	31.80%	40.00%
Debt/Equity ratio	14.66	14.66
Cost of debt	5.50%	14.90%

After-tax WACC	4.0%	9.3%


Selected WACC	6.7%

ACD.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 ACD.TO:

cost_of_equity (11.75%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.04) + 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.