AI.TO
Atrium Mortgage Investment Corp
Price:  
10.94 
CAD
Volume:  
17,042.00
Canada | Thrifts & Mortgage Finance
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AI.TO WACC - Weighted Average Cost of Capital

The WACC of Atrium Mortgage Investment Corp (AI.TO) is 6.6%.

The Cost of Equity of Atrium Mortgage Investment Corp (AI.TO) is 8.30%.
The Cost of Debt of Atrium Mortgage Investment Corp (AI.TO) is 5.55%.

Range Selected
Cost of equity 6.90% - 9.70% 8.30%
Tax rate 25.90% - 26.50% 26.20%
Cost of debt 5.40% - 5.70% 5.55%
WACC 5.7% - 7.5% 6.6%
WACC

AI.TO WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.73 0.91
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.90% 9.70%
Tax rate 25.90% 26.50%
Debt/Equity ratio 0.65 0.65
Cost of debt 5.40% 5.70%
After-tax WACC 5.7% 7.5%
Selected WACC 6.6%

AI.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 AI.TO:

cost_of_equity (8.30%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.73) + 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.