BYD.TO WACC - Weighted Average Cost of Capital

The WACC of Boyd Group Services Inc (BYD.TO) is 7.8%.

The Cost of Equity of Boyd Group Services Inc (BYD.TO) is 7.55%.

The Cost of Debt of Boyd Group Services Inc (BYD.TO) is 11.60%.

	Range	Selected
Cost of equity	6.40% - 8.70%	7.55%
Tax rate	27.30% - 28.60%	27.95%
Cost of debt	8.30% - 14.90%	11.60%
WACC	6.3% - 9.3%	7.8%

WACC

BYD.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.64	0.75

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.40%	8.70%

Tax rate	27.30%	28.60%
Debt/Equity ratio	0.43	0.43
Cost of debt	8.30%	14.90%

After-tax WACC	6.3%	9.3%


Selected WACC	7.8%

BYD.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 BYD.TO:

cost_of_equity (7.55%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.64) + 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.