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

The WACC of Andrew Peller Ltd (ADW.A.TO) is 6.0%.

The Cost of Equity of Andrew Peller Ltd (ADW.A.TO) is 7.55%.

The Cost of Debt of Andrew Peller Ltd (ADW.A.TO) is 5.60%.

	Range	Selected
Cost of equity	6.00% - 9.10%	7.55%
Tax rate	24.10% - 26.30%	25.20%
Cost of debt	4.90% - 6.30%	5.60%
WACC	5.0% - 7.1%	6.0%

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	0.56	0.81

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.00%	9.10%

Tax rate	24.10%	26.30%
Debt/Equity ratio	0.82	0.82
Cost of debt	4.90%	6.30%

After-tax WACC	5.0%	7.1%


Selected WACC	6.0%

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 (7.55%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.56) + 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.