BNS.TO
Bank of Nova Scotia
Price:  
73.43 
CAD
Volume:  
657,552.00
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BNS.TO WACC - Weighted Average Cost of Capital

The WACC of Bank of Nova Scotia (BNS.TO) is 5.9%.

The Cost of Equity of Bank of Nova Scotia (BNS.TO) is 11.05%.
The Cost of Debt of Bank of Nova Scotia (BNS.TO) is 5.00%.

Range Selected
Cost of equity 9.20% - 12.90% 11.05%
Tax rate 21.00% - 21.70% 21.35%
Cost of debt 5.00% - 5.00% 5.00%
WACC 5.4% - 6.4% 5.9%
WACC

BNS.TO WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta 1.19 1.44
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.20% 12.90%
Tax rate 21.00% 21.70%
Debt/Equity ratio 2.67 2.67
Cost of debt 5.00% 5.00%
After-tax WACC 5.4% 6.4%
Selected WACC 5.9%

BNS.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 BNS.TO:

cost_of_equity (11.05%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.19) + 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.