BTB.UN.TO WACC - Weighted Average Cost of Capital

The WACC of BTB Real Estate Investment Trust (BTB.UN.TO) is 6.2%.

The Cost of Equity of BTB Real Estate Investment Trust (BTB.UN.TO) is 11.35%.

The Cost of Debt of BTB Real Estate Investment Trust (BTB.UN.TO) is 5.55%.

	Range	Selected
Cost of equity	9.30% - 13.40%	11.35%
Tax rate	25.90% - 26.50%	26.20%
Cost of debt	4.30% - 6.80%	5.55%
WACC	5.0% - 7.4%	6.2%

WACC

BTB.UN.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	1.21	1.52

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.30%	13.40%

Tax rate	25.90%	26.50%
Debt/Equity ratio	2.41	2.41
Cost of debt	4.30%	6.80%

After-tax WACC	5.0%	7.4%


Selected WACC	6.2%

BTB.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 BTB.UN.TO:

cost_of_equity (11.35%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.21) + 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.