The WACC of BBTV Holdings Inc (BBTV.TO) is 6.2%.
Range | Selected | |
Cost of equity | 18.70% - 24.10% | 21.40% |
Tax rate | 20.90% - 27.00% | 23.95% |
Cost of debt | 4.00% - 7.00% | 5.50% |
WACC | 5.0% - 7.4% | 6.2% |
Category | Low | High |
Long-term bond rate | 3.2% | 3.7% |
Equity market risk premium | 5.1% | 6.1% |
Adjusted beta | 3.04 | 3.28 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 18.70% | 24.10% |
Tax rate | 20.90% | 27.00% |
Debt/Equity ratio | 7.48 | 7.48 |
Cost of debt | 4.00% | 7.00% |
After-tax WACC | 5.0% | 7.4% |
Selected WACC | 6.2% | |
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 BBTV.TO:
cost_of_equity (21.40%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (3.04) + 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.