AXIS.TO WACC - Weighted Average Cost of Capital

The WACC of Axis Auto Finance Inc (AXIS.TO) is 12.7%.

The Cost of Equity of Axis Auto Finance Inc (AXIS.TO) is 358.30%.

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

	Range	Selected
Cost of equity	222.10% - 494.50%	358.30%
Tax rate	21.20% - 26.60%	23.90%
Cost of debt	7.50% - 23.20%	15.35%
WACC	6.7% - 18.7%	12.7%

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	42.94	80.39

Additional risk adjustments	0.0%	0.5%
Cost of equity	222.10%	494.50%

Tax rate	21.20%	26.60%
Debt/Equity ratio	273.27	273.27
Cost of debt	7.50%	23.20%

After-tax WACC	6.7%	18.7%


Selected WACC	12.7%

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 (358.30%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (42.94) + 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.