AFN.TO WACC - Weighted Average Cost of Capital

The WACC of Ag Growth International Inc (AFN.TO) is 8.6%.

The Cost of Equity of Ag Growth International Inc (AFN.TO) is 13.20%.

The Cost of Debt of Ag Growth International Inc (AFN.TO) is 6.10%.

	Range	Selected
Cost of equity	11.40% - 15.00%	13.20%
Tax rate	17.00% - 21.50%	19.25%
Cost of debt	5.90% - 6.30%	6.10%
WACC	7.8% - 9.4%	8.6%

WACC

AFN.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	1.61	1.77

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.40%	15.00%

Tax rate	17.00%	21.50%
Debt/Equity ratio	1.25	1.25
Cost of debt	5.90%	6.30%

After-tax WACC	7.8%	9.4%


Selected WACC	8.6%

AFN.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 AFN.TO:

cost_of_equity (13.20%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.61) + 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.