CAS.TO WACC - Weighted Average Cost of Capital
The WACC of Cascades Inc (CAS.TO) is 5.0%.
| Range | Selected | |
| Cost of equity | 6.9% - 9.6% | 8.25% |
| Tax rate | 22.1% - 34.2% | 28.15% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 4.8% - 5.2% | 5.0% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.73 | 0.9 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.9% | 9.6% |
| Tax rate | 22.1% | 34.2% |
| Debt/Equity ratio | 2.27 | 2.27 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 4.8% | 5.2% |
| Selected WACC | 5.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| CAS.TO | Cascades Inc | 2.27 | 1.04 | 0.38 |
| ACGX | Alliance Creative Group Inc | 95.73 | -1.44 | -0.02 |
| GPK | Graphic Packaging Holding Co | 0.78 | 0.42 | 0.26 |
| IFX.V | Imaflex Inc | 0.15 | 0.04 | 0.04 |
| PKG | Packaging Corp of America | 0.14 | 0.72 | 0.66 |
| SEE | Sealed Air Corp | 0.92 | 1 | 0.59 |
| SON | Sonoco Products Co | 1.53 | 0.54 | 0.25 |
| UFPT | UFP Technologies Inc | 0.1 | 1.43 | 1.33 |
| VKSC | Viskase Companies Inc | 1.39 | -0.14 | -0.07 |
| HART.CO | Broedrene Hartmann A/S | 0.45 | 0.23 | 0.17 |
| Low | High | |
| Unlevered beta | 0.22 | 0.31 |
| Relevered beta | 0.6 | 0.85 |
| Adjusted relevered beta | 0.73 | 0.9 |
CAS.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 CAS.TO:
cost_of_equity (8.25%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.73) + 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.