BDI.TO WACC - Weighted Average Cost of Capital
The WACC of Black Diamond Group Ltd (BDI.TO) is 6.4%.
| Range | Selected | |
| Cost of equity | 5.9% - 9.0% | 7.45% |
| Tax rate | 20.6% - 25.3% | 22.95% |
| Cost of debt | 4.6% - 5.0% | 4.8% |
| WACC | 5.3% - 7.6% | 6.4% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.54 | 0.8 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.9% | 9.0% |
| Tax rate | 20.6% | 25.3% |
| Debt/Equity ratio | 0.39 | 0.39 |
| Cost of debt | 4.6% | 5.0% |
| After-tax WACC | 5.3% | 7.6% |
| Selected WACC | 6.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| BDI.TO | Black Diamond Group Ltd | 0.39 | 0.89 | 0.69 |
| ACU | Acme United Corp | 0.17 | 0.5 | 0.44 |
| CHMP | Champion Industries Inc | 6.58 | 0.21 | 0.03 |
| INQ.TO | Inscape Corp | 57.23 | 0.51 | 0.01 |
| KBL.TO | K-Bro Linen Inc | 0.4 | 0.51 | 0.39 |
| NL | NL Industries Inc | 0 | 0.97 | 0.97 |
| PFMT | Performant Financial Corp | 0.02 | -0.4 | -0.39 |
| VIRC | Virco Mfg. Corp | 0.03 | 1.23 | 1.2 |
| VTX.V | Vertex Resource Group Ltd | 4.69 | -0.26 | -0.06 |
| GYG.L | GYG PLC | 1.1 | 1.78 | 0.96 |
| Low | High | |
| Unlevered beta | 0.25 | 0.54 |
| Relevered beta | 0.31 | 0.7 |
| Adjusted relevered beta | 0.54 | 0.8 |
BDI.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 BDI.TO:
cost_of_equity (7.45%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.54) + 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.