BDI.TO
Black Diamond Group Ltd
Price:  
10.95 
CAD
Volume:  
111,742
Canada | Commercial Services & Supplies

BDI.TO WACC - Weighted Average Cost of Capital

The WACC of Black Diamond Group Ltd (BDI.TO) is 6.4%.

The Cost of Equity of Black Diamond Group Ltd (BDI.TO) is 7.45%.
The Cost of Debt of Black Diamond Group Ltd (BDI.TO) is 4.8%.

RangeSelected
Cost of equity5.9% - 9.0%7.45%
Tax rate20.6% - 25.3%22.95%
Cost of debt4.6% - 5.0%4.8%
WACC5.3% - 7.6%6.4%
WACC

BDI.TO WACC calculation

CategoryLowHigh
Long-term bond rate3.2%3.7%
Equity market risk premium5.1%6.1%
Adjusted beta0.540.8
Additional risk adjustments0.0%0.5%
Cost of equity5.9%9.0%
Tax rate20.6%25.3%
Debt/Equity ratio
0.390.39
Cost of debt4.6%5.0%
After-tax WACC5.3%7.6%
Selected WACC6.4%

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.