CGO.TO WACC - Weighted Average Cost of Capital
The WACC of Cogeco Inc (CGO.TO) is 5.8%.
| Range | Selected | |
| Cost of equity | 10.0% - 25.8% | 17.9% |
| Tax rate | 18.0% - 19.9% | 18.95% |
| Cost of debt | 4.8% - 6.3% | 5.55% |
| WACC | 4.6% - 7.0% | 5.8% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 1.34 | 3.55 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.0% | 25.8% |
| Tax rate | 18.0% | 19.9% |
| Debt/Equity ratio | 9.39 | 9.39 |
| Cost of debt | 4.8% | 6.3% |
| After-tax WACC | 4.6% | 7.0% |
| Selected WACC | 5.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| CGO.TO | Cogeco Inc | 9.39 | 0.46 | 0.05 |
| CABO | Cable One Inc | 3.89 | 0.18 | 0.04 |
| CCA.TO | Cogeco Communications Inc | 1.64 | 0.36 | 0.15 |
| LBRDA | Liberty Broadband Corp | 0.31 | 0.71 | 0.57 |
| MDP | Meredith Corp | 1.02 | 2.06 | 1.13 |
| MSGN | MSG Networks Inc | 1.34 | 1.15 | 0.55 |
| QBR.B.TO | Quebecor Inc | 0.91 | -0.12 | -0.07 |
| SCHL | Scholastic Corp | 0.02 | 1.11 | 1.09 |
| SIRI | Sirius XM Holdings Inc | 1.42 | 1.21 | 0.56 |
| WOW | WideOpenWest Inc | 2.75 | 0.61 | 0.19 |
| Low | High | |
| Unlevered beta | 0.17 | 0.55 |
| Relevered beta | 1.51 | 4.81 |
| Adjusted relevered beta | 1.34 | 3.55 |
CGO.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 CGO.TO:
cost_of_equity (17.90%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.34) + 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.