The WACC of Bespoke Capital Acquisition Corp (BC.U.TO) is 7.0%.
Range | Selected | |
Cost of equity | 9.1% - 11.9% | 10.5% |
Tax rate | 24.6% - 36.9% | 30.75% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 6.4% - 7.5% | 7.0% |
Category | Low | High |
Long-term bond rate | 3.4% | 3.9% |
Equity market risk premium | 4.2% | 5.2% |
Adjusted beta | 1.35 | 1.44 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 9.1% | 11.9% |
Tax rate | 24.6% | 36.9% |
Debt/Equity ratio | 1 | 1 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 6.4% | 7.5% |
Selected WACC | 7.0% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
BC.U.TO | Bespoke Capital Acquisition Corp | 1.19 | 0.93 | 0.51 |
ACV | Virtus AllianzGI Diversified Income & Convertible Fund | 0.45 | 3.55 | 2.71 |
CCYC | Clancy Corp | 0 | 3.55 | 3.54 |
CFVIU | CF Acquisition Corp VI | 0 | 0.93 | 0.93 |
CHN | China Fund Inc | 0 | 3.55 | 3.54 |
CPZ | Calamos Long/Short Equity & Dynamic Income Trust | 1.15 | 3.55 | 1.97 |
EMF | Templeton Emerging Markets Fund Inc | 0.04 | 3.55 | 3.44 |
FEI | First Trust MLP and Energy Income Fund | 0.21 | 3.55 | 3.09 |
GPM | Guggenheim Enhanced Equity Income Fund | 0.33 | 1.45 | 1.17 |
RMM | RiverNorth Managed Duration Municipal Income Fund Inc | 0.8 | 3.55 | 2.28 |
Low | High | |
Unlevered beta | 2.16 | 2.86 |
Relevered beta | 1.52 | 1.66 |
Adjusted relevered beta | 1.35 | 1.44 |
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 BC.U.TO:
cost_of_equity (10.50%) = risk_free_rate (3.65%) + equity_risk_premium (4.70%) * adjusted_beta (1.35) + 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.