ADW.A.TO WACC - Weighted Average Cost of Capital

The WACC of Andrew Peller Ltd (ADW.A.TO) is 6.1%.

The Cost of Equity of Andrew Peller Ltd (ADW.A.TO) is 6.85%.

The Cost of Debt of Andrew Peller Ltd (ADW.A.TO) is 5.80%.

	Range	Selected
Cost of equity	5.70% - 8.00%	6.85%
Tax rate	23.50% - 25.70%	24.60%
Cost of debt	4.90% - 6.70%	5.80%
WACC	5.1% - 7.1%	6.1%

WACC

ADW.A.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.5	0.64

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.70%	8.00%

Tax rate	23.50%	25.70%
Debt/Equity ratio	0.47	0.47
Cost of debt	4.90%	6.70%

After-tax WACC	5.1%	7.1%


Selected WACC	6.1%

ADW.A.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 ADW.A.TO:

cost_of_equity (6.85%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.5) + 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.