AI.TO WACC - Weighted Average Cost of Capital

The WACC of Atrium Mortgage Investment Corp (AI.TO) is 6.7%.

The Cost of Equity of Atrium Mortgage Investment Corp (AI.TO) is 8.35%.

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

	Range	Selected
Cost of equity	7.00% - 9.70%	8.35%
Tax rate	25.90% - 26.50%	26.20%
Cost of debt	5.40% - 5.70%	5.55%
WACC	5.8% - 7.6%	6.7%

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	0.75	0.91

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.00%	9.70%

Tax rate	25.90%	26.50%
Debt/Equity ratio	0.63	0.63
Cost of debt	5.40%	5.70%

After-tax WACC	5.8%	7.6%


Selected WACC	6.7%

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 (8.35%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.75) + 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.