ACD.TO
Accord Financial Corp
Price:  
3.55 
CAD
Volume:  
1,900.00
Canada | Diversified Financial Services
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ACD.TO WACC - Weighted Average Cost of Capital

The WACC of Accord Financial Corp (ACD.TO) is 7.9%.

The Cost of Equity of Accord Financial Corp (ACD.TO) is 19.80%.
The Cost of Debt of Accord Financial Corp (ACD.TO) is 10.70%.

Range Selected
Cost of equity 15.60% - 24.00% 19.80%
Tax rate 31.00% - 40.00% 35.50%
Cost of debt 6.50% - 14.90% 10.70%
WACC 5.5% - 10.3% 7.9%
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 2.45 3.26
Additional risk adjustments 0.0% 0.5%
Cost of equity 15.60% 24.00%
Tax rate 31.00% 40.00%
Debt/Equity ratio 10.32 10.32
Cost of debt 6.50% 14.90%
After-tax WACC 5.5% 10.3%
Selected WACC 7.9%

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 (19.80%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (2.45) + 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.