ATA.TO WACC - Weighted Average Cost of Capital

The WACC of ATS Automation Tooling Systems Inc (ATA.TO) is 9.4%.

The Cost of Equity of ATS Automation Tooling Systems Inc (ATA.TO) is 10.70%.

The Cost of Debt of ATS Automation Tooling Systems Inc (ATA.TO) is 6.05%.

	Range	Selected
Cost of equity	9.20% - 12.20%	10.70%
Tax rate	21.50% - 22.40%	21.95%
Cost of debt	4.90% - 7.20%	6.05%
WACC	8.1% - 10.8%	9.4%

WACC

ATA.TO WACC calculation

Category	Low	High

Long-term bond rate	3.6%	4.1%
Equity market risk premium	4.7%	5.7%
Adjusted beta	1.17	1.31

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.20%	12.20%

Tax rate	21.50%	22.40%
Debt/Equity ratio	0.27	0.27
Cost of debt	4.90%	7.20%

After-tax WACC	8.1%	10.8%


Selected WACC	9.4%

ATA.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 ATA.TO:

cost_of_equity (10.70%) = risk_free_rate (3.85%) + equity_risk_premium (5.20%) * adjusted_beta (1.17) + 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.