CFF.TO WACC - Weighted Average Cost of Capital

The WACC of Conifex Timber Inc (CFF.TO) is 6.2%.

The Cost of Equity of Conifex Timber Inc (CFF.TO) is 9.00%.

The Cost of Debt of Conifex Timber Inc (CFF.TO) is 7.40%.

	Range	Selected
Cost of equity	6.70% - 11.30%	9.00%
Tax rate	18.80% - 26.30%	22.55%
Cost of debt	7.00% - 7.80%	7.40%
WACC	5.8% - 6.6%	6.2%

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	0.7	1.18

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.70%	11.30%

Tax rate	18.80%	26.30%
Debt/Equity ratio	5.84	5.84
Cost of debt	7.00%	7.80%

After-tax WACC	5.8%	6.6%


Selected WACC	6.2%

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 (9.00%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.7) + 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.