ACD.TO WACC - Weighted Average Cost of Capital

The WACC of Accord Financial Corp (ACD.TO) is 5.6%.

The Cost of Equity of Accord Financial Corp (ACD.TO) is 39.60%.

The Cost of Debt of Accord Financial Corp (ACD.TO) is 7.40%.

	Range	Selected
Cost of equity	22.20% - 57.00%	39.60%
Tax rate	31.00% - 37.70%	34.35%
Cost of debt	7.00% - 7.80%	7.40%
WACC	5.2% - 6.0%	5.6%

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	3.74	8.67

Additional risk adjustments	0.0%	0.5%
Cost of equity	22.20%	57.00%

Tax rate	31.00%	37.70%
Debt/Equity ratio	45.54	45.54
Cost of debt	7.00%	7.80%

After-tax WACC	5.2%	6.0%


Selected WACC	5.6%

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 (39.60%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (3.74) + 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.