CFF.TO WACC - Weighted Average Cost of Capital

The WACC of Conifex Timber Inc (CFF.TO) is 6.5%.

The Cost of Equity of Conifex Timber Inc (CFF.TO) is 15.05%.

The Cost of Debt of Conifex Timber Inc (CFF.TO) is 8.30%.

	Range	Selected
Cost of equity	12.70% - 17.40%	15.05%
Tax rate	26.90% - 28.00%	27.45%
Cost of debt	7.00% - 9.60%	8.30%
WACC	5.5% - 7.4%	6.5%

WACC

CFF.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	1.87	2.17

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.70%	17.40%

Tax rate	26.90%	28.00%
Debt/Equity ratio	19.54	19.54
Cost of debt	7.00%	9.60%

After-tax WACC	5.5%	7.4%


Selected WACC	6.5%

CFF.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 CFF.TO:

cost_of_equity (15.05%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.87) + 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.