AGF.B.TO WACC - Weighted Average Cost of Capital

The WACC of AGF Management Ltd (AGF.B.TO) is 7.7%.

The Cost of Equity of AGF Management Ltd (AGF.B.TO) is 8.35%.

The Cost of Debt of AGF Management Ltd (AGF.B.TO) is 4.25%.

	Range	Selected
Cost of equity	6.70% - 10.00%	8.35%
Tax rate	23.40% - 23.70%	23.55%
Cost of debt	4.00% - 4.50%	4.25%
WACC	6.2% - 9.2%	7.7%

WACC

AGF.B.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.69	0.96

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.70%	10.00%

Tax rate	23.40%	23.70%
Debt/Equity ratio	0.14	0.14
Cost of debt	4.00%	4.50%

After-tax WACC	6.2%	9.2%


Selected WACC	7.7%

AGF.B.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 AGF.B.TO:

cost_of_equity (8.35%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.69) + 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.