AP.UN.TO WACC - Weighted Average Cost of Capital

The WACC of Allied Properties Real Estate Investment Trust (AP.UN.TO) is 6.7%.

The Cost of Equity of Allied Properties Real Estate Investment Trust (AP.UN.TO) is 10.80%.

The Cost of Debt of Allied Properties Real Estate Investment Trust (AP.UN.TO) is 6.40%.

	Range	Selected
Cost of equity	9.20% - 12.40%	10.80%
Tax rate	25.90% - 26.50%	26.20%
Cost of debt	4.40% - 8.40%	6.40%
WACC	5.2% - 8.2%	6.7%

WACC

AP.UN.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	1.18	1.35

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.20%	12.40%

Tax rate	25.90%	26.50%
Debt/Equity ratio	2.05	2.05
Cost of debt	4.40%	8.40%

After-tax WACC	5.2%	8.2%


Selected WACC	6.7%

AP.UN.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 AP.UN.TO:

cost_of_equity (10.80%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.18) + 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.