BLB.UN.TO WACC - Weighted Average Cost of Capital
The WACC of Bloom Select Income Fund (BLB.UN.TO) is 6.1%.
| Range | Selected | |
| Cost of equity | 7.1% - 9.9% | 8.5% |
| Tax rate | 25.9% - 26.5% | 26.2% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.4% - 6.8% | 6.1% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.77 | 0.94 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.1% | 9.9% |
| Tax rate | 25.9% | 26.5% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.4% | 6.8% |
| Selected WACC | 6.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| BLB.UN.TO | Bloom Select Income Fund | 1.12 | 0.9 | 0.49 |
| ACMC | American Church Mortgage Co | 89.78 | 0.42 | 0.01 |
| HRR.UN.TO | Australian REIT Income Fund | 0.52 | 1.69 | 1.23 |
| HWIS | Home Bancorp of Wisconsin Inc | 0.36 | 0.78 | 0.61 |
| SUGR | Sugar Creek Financial Corp | 0.02 | 0.38 | 0.37 |
| TCA.V | Timia Capital Corp | 2.12 | 0.99 | 0.39 |
| WI.V | Western Investment Company of Canada Ltd | 0.07 | 0.65 | 0.62 |
| ZC.V | Zimtu Capital Corp | 0.14 | -1.25 | -1.13 |
| Low | High | |
| Unlevered beta | 0.38 | 0.52 |
| Relevered beta | 0.66 | 0.91 |
| Adjusted relevered beta | 0.77 | 0.94 |
BLB.UN.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 BLB.UN.TO:
cost_of_equity (8.50%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.77) + 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.