CCA.TO WACC - Weighted Average Cost of Capital

The WACC of Cogeco Communications Inc (CCA.TO) is 6.1%.

The Cost of Equity of Cogeco Communications Inc (CCA.TO) is 8.95%.

The Cost of Debt of Cogeco Communications Inc (CCA.TO) is 5.55%.

	Range	Selected
Cost of equity	6.30% - 11.60%	8.95%
Tax rate	18.10% - 19.90%	19.00%
Cost of debt	4.80% - 6.30%	5.55%
WACC	4.8% - 7.5%	6.1%

WACC

CCA.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.62	1.22

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.30%	11.60%

Tax rate	18.10%	19.90%
Debt/Equity ratio	1.72	1.72
Cost of debt	4.80%	6.30%

After-tax WACC	4.8%	7.5%


Selected WACC	6.1%

CCA.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 CCA.TO:

cost_of_equity (8.95%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.62) + 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.