ATD.B.TO WACC - Weighted Average Cost of Capital
The WACC of Alimentation Couche-Tard Inc (ATD.B.TO) is 6.3%.
| Range | Selected | |
| Cost of equity | 5.7% - 8.1% | 6.9% |
| Tax rate | 19.2% - 19.6% | 19.4% |
| Cost of debt | 4.2% - 4.5% | 4.35% |
| WACC | 5.3% - 7.2% | 6.3% |
| Category | Low | High |
| Long-term bond rate | 3.4% | 3.9% |
| Equity market risk premium | 4.7% | 5.7% |
| Adjusted beta | 0.5 | 0.65 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.7% | 8.1% |
| Tax rate | 19.2% | 19.6% |
| Debt/Equity ratio | 0.23 | 0.23 |
| Cost of debt | 4.2% | 4.5% |
| After-tax WACC | 5.3% | 7.2% |
| Selected WACC | 6.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| ATD.B.TO | Alimentation Couche-Tard Inc | 0.23 | 0.92 | 0.77 |
| ACI | Albertsons Companies Inc | 0.6 | 0.1 | 0.07 |
| CASY | Caseys General Stores Inc | 0.1 | 0.62 | 0.57 |
| EMP.A.TO | Empire Company Ltd | 0.62 | 0.27 | 0.18 |
| IMKTA | Ingles Markets Inc | 0.46 | 0.39 | 0.29 |
| L.TO | Loblaw Companies Ltd | 0.29 | 0.4 | 0.32 |
| MRU.TO | Metro Inc | 0.19 | 0.36 | 0.31 |
| SFM | Sprouts Farmers Market Inc | 0 | 0.75 | 0.75 |
| VLGEA | Village Super Market Inc | 0.18 | 0.35 | 0.31 |
| WN.TO | George Weston Ltd | 0.65 | 0.43 | 0.28 |
| Low | High | |
| Unlevered beta | 0.3 | 0.32 |
| Relevered beta | 0.25 | 0.48 |
| Adjusted relevered beta | 0.5 | 0.65 |
ATD.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 ATD.B.TO:
cost_of_equity (6.90%) = risk_free_rate (3.65%) + equity_risk_premium (5.20%) * adjusted_beta (0.5) + 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.