BC.U.TO WACC - Weighted Average Cost of Capital

The WACC of Bespoke Capital Acquisition Corp (BC.U.TO) is 7.0%.

The Cost of Equity of Bespoke Capital Acquisition Corp (BC.U.TO) is 10.50%.

The Cost of Debt of Bespoke Capital Acquisition Corp (BC.U.TO) is 5.00%.

	Range	Selected
Cost of equity	9.10% - 11.90%	10.50%
Tax rate	24.60% - 36.90%	30.75%
Cost of debt	5.00% - 5.00%	5.00%
WACC	6.4% - 7.5%	7.0%

WACC

BC.U.TO WACC calculation

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	9.10%	11.90%

Tax rate	24.60%	36.90%
Debt/Equity ratio	1	1
Cost of debt	5.00%	5.00%

After-tax WACC	6.4%	7.5%


Selected WACC	7.0%

BC.U.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 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.