BCE.TO WACC - Weighted Average Cost of Capital

The WACC of BCE Inc (BCE.TO) is 4.4%.

The Cost of Equity of BCE Inc (BCE.TO) is 5.50%.

The Cost of Debt of BCE Inc (BCE.TO) is 4.90%.

	Range	Selected
Cost of equity	4.80% - 6.20%	5.50%
Tax rate	25.90% - 27.90%	26.90%
Cost of debt	4.40% - 5.40%	4.90%
WACC	3.9% - 4.8%	4.4%

WACC

BCE.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.32	0.34

Additional risk adjustments	0.0%	0.5%
Cost of equity	4.80%	6.20%

Tax rate	25.90%	27.90%
Debt/Equity ratio	1.48	1.48
Cost of debt	4.40%	5.40%

After-tax WACC	3.9%	4.8%


Selected WACC	4.4%

BCE.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 BCE.TO:

cost_of_equity (5.50%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.32) + 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.