BEK.B.TO
Becker Milk Co Ltd
Price:  
13.25 
CAD
Volume:  
3,000
Canada | Real Estate Management & Development

BEK.B.TO WACC - Weighted Average Cost of Capital

The WACC of Becker Milk Co Ltd (BEK.B.TO) is 5.6%.

The Cost of Equity of Becker Milk Co Ltd (BEK.B.TO) is 7.55%.
The Cost of Debt of Becker Milk Co Ltd (BEK.B.TO) is 5%.

RangeSelected
Cost of equity6.2% - 8.9%7.55%
Tax rate24.2% - 29.7%26.95%
Cost of debt5.0% - 5.0%5%
WACC5.0% - 6.2%5.6%
WACC

BEK.B.TO WACC calculation

CategoryLowHigh
Long-term bond rate3.2%3.7%
Equity market risk premium5.1%6.1%
Adjusted beta0.590.77
Additional risk adjustments0.0%0.5%
Cost of equity6.2%8.9%
Tax rate24.2%29.7%
Debt/Equity ratio
11
Cost of debt5.0%5.0%
After-tax WACC5.0%6.2%
Selected WACC5.6%

BEK.B.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 BEK.B.TO:

cost_of_equity (7.55%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.59) + 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.