AD.UN.TO WACC - Weighted Average Cost of Capital

The WACC of Alaris Equity Partners Income Trust (AD.UN.TO) is 8.1%.

The Cost of Equity of Alaris Equity Partners Income Trust (AD.UN.TO) is 8.45%.

The Cost of Debt of Alaris Equity Partners Income Trust (AD.UN.TO) is 4.45%.

	Range	Selected
Cost of equity	6.90% - 10.00%	8.45%
Tax rate	14.70% - 16.90%	15.80%
Cost of debt	4.00% - 4.90%	4.45%
WACC	6.7% - 9.5%	8.1%

WACC

AD.UN.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.74	0.95

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.90%	10.00%

Tax rate	14.70%	16.90%
Debt/Equity ratio	0.08	0.08
Cost of debt	4.00%	4.90%

After-tax WACC	6.7%	9.5%


Selected WACC	8.1%

AD.UN.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 AD.UN.TO:

cost_of_equity (8.45%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.74) + 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.