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

The WACC of Andrew Peller Ltd (ADW.A.TO) is 6.2%.

The Cost of Equity of Andrew Peller Ltd (ADW.A.TO) is 7.50%.

The Cost of Debt of Andrew Peller Ltd (ADW.A.TO) is 6.50%.

	Range	Selected
Cost of equity	6.00% - 9.00%	7.50%
Tax rate	24.10% - 26.30%	25.20%
Cost of debt	6.30% - 6.70%	6.50%
WACC	5.4% - 7.0%	6.2%

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	0.79

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.00%	9.00%

Tax rate	24.10%	26.30%
Debt/Equity ratio	0.99	0.99
Cost of debt	6.30%	6.70%

After-tax WACC	5.4%	7.0%


Selected WACC	6.2%

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 (7.50%) = 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.