CGI.TO
Canadian General Investments Ltd
Price:  
34.90 
CAD
Volume:  
2,561.00
Canada | N/A
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CGI.TO WACC - Weighted Average Cost of Capital

The WACC of Canadian General Investments Ltd (CGI.TO) is 8.0%.

The Cost of Equity of Canadian General Investments Ltd (CGI.TO) is 8.60%.
The Cost of Debt of Canadian General Investments Ltd (CGI.TO) is 5.70%.

Range Selected
Cost of equity 7.10% - 10.10% 8.60%
Tax rate 0.50% - 1.80% 1.15%
Cost of debt 4.40% - 7.00% 5.70%
WACC 6.5% - 9.4% 8.0%
WACC

CGI.TO WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.77 0.97
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.10% 10.10%
Tax rate 0.50% 1.80%
Debt/Equity ratio 0.27 0.27
Cost of debt 4.40% 7.00%
After-tax WACC 6.5% 9.4%
Selected WACC 8.0%

CGI.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 CGI.TO:

cost_of_equity (8.60%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.77) + 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.