BDGI.TO WACC - Weighted Average Cost of Capital

The WACC of Badger Infrastructure Solutions Ltd (BDGI.TO) is 7.5%.

The Cost of Equity of Badger Infrastructure Solutions Ltd (BDGI.TO) is 8.15%.

The Cost of Debt of Badger Infrastructure Solutions Ltd (BDGI.TO) is 5.10%.

	Range	Selected
Cost of equity	6.50% - 9.80%	8.15%
Tax rate	24.20% - 26.00%	25.10%
Cost of debt	4.20% - 6.00%	5.10%
WACC	6.0% - 9.0%	7.5%

WACC

BDGI.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.65	0.92

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.50%	9.80%

Tax rate	24.20%	26.00%
Debt/Equity ratio	0.16	0.16
Cost of debt	4.20%	6.00%

After-tax WACC	6.0%	9.0%


Selected WACC	7.5%

BDGI.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 BDGI.TO:

cost_of_equity (8.15%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.65) + 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.