AXIS.TO
Axis Auto Finance Inc
Price:  
0.01 
CAD
Volume:  
574,440.00
Canada | Consumer Finance
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AXIS.TO WACC - Weighted Average Cost of Capital

The WACC of Axis Auto Finance Inc (AXIS.TO) is 13.2%.

The Cost of Equity of Axis Auto Finance Inc (AXIS.TO) is 485.35%.
The Cost of Debt of Axis Auto Finance Inc (AXIS.TO) is 15.35%.

Range Selected
Cost of equity 341.60% - 629.10% 485.35%
Tax rate 21.20% - 26.60% 23.90%
Cost of debt 7.50% - 23.20% 15.35%
WACC 7.1% - 19.2% 13.2%
WACC

AXIS.TO WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta 66.36 102.45
Additional risk adjustments 0.0% 0.5%
Cost of equity 341.60% 629.10%
Tax rate 21.20% 26.60%
Debt/Equity ratio 273.27 273.27
Cost of debt 7.50% 23.20%
After-tax WACC 7.1% 19.2%
Selected WACC 13.2%

AXIS.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 AXIS.TO:

cost_of_equity (485.35%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (66.36) + 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.