ATS.TO WACC - Weighted Average Cost of Capital

The WACC of ATS Corp (ATS.TO) is 9.0%.

The Cost of Equity of ATS Corp (ATS.TO) is 8.40%.

The Cost of Debt of ATS Corp (ATS.TO) is 13.15%.

	Range	Selected
Cost of equity	6.00% - 10.80%	8.40%
Tax rate	20.80% - 21.30%	21.05%
Cost of debt	6.10% - 20.20%	13.15%
WACC	5.6% - 12.4%	9.0%

WACC

ATS.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.56	1.08

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.00%	10.80%

Tax rate	20.80%	21.30%
Debt/Equity ratio	0.46	0.46
Cost of debt	6.10%	20.20%

After-tax WACC	5.6%	12.4%


Selected WACC	9.0%

ATS.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 ATS.TO:

cost_of_equity (8.40%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.56) + 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.