ATD.TO
Alimentation Couche-Tard Inc
Price:  
69.61 
CAD
Volume:  
1,292,521.00
Canada | Food & Staples Retailing
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ATD.TO WACC - Weighted Average Cost of Capital

The WACC of Alimentation Couche-Tard Inc (ATD.TO) is 5.7%.

The Cost of Equity of Alimentation Couche-Tard Inc (ATD.TO) is 6.30%.
The Cost of Debt of Alimentation Couche-Tard Inc (ATD.TO) is 4.35%.

Range Selected
Cost of equity 5.50% - 7.10% 6.30%
Tax rate 21.10% - 21.40% 21.25%
Cost of debt 4.20% - 4.50% 4.35%
WACC 5.0% - 6.3% 5.7%
WACC

ATD.TO WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.47 0.48
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.50% 7.10%
Tax rate 21.10% 21.40%
Debt/Equity ratio 0.29 0.29
Cost of debt 4.20% 4.50%
After-tax WACC 5.0% 6.3%
Selected WACC 5.7%

ATD.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.TO:

cost_of_equity (6.30%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.47) + 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.