ACD.TO
Accord Financial Corp
Price:  
3.51 
CAD
Volume:  
3,900.00
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 7.1%.

The Cost of Equity of Accord Financial Corp (ACD.TO) is 11.15%.
The Cost of Debt of Accord Financial Corp (ACD.TO) is 10.70%.

Range Selected
Cost of equity 8.20% - 14.10% 11.15%
Tax rate 31.00% - 40.00% 35.50%
Cost of debt 6.50% - 14.90% 10.70%
WACC 4.8% - 9.4% 7.1%
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 0.99 1.64
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.20% 14.10%
Tax rate 31.00% 40.00%
Debt/Equity ratio 10.43 10.43
Cost of debt 6.50% 14.90%
After-tax WACC 4.8% 9.4%
Selected WACC 7.1%

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 (11.15%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.99) + 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.