CGO.TO
Cogeco Inc
Price:  
68.00 
CAD
Volume:  
5,745.00
Canada | Media
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CGO.TO WACC - Weighted Average Cost of Capital

The WACC of Cogeco Inc (CGO.TO) is 5.8%.

The Cost of Equity of Cogeco Inc (CGO.TO) is 15.50%.
The Cost of Debt of Cogeco Inc (CGO.TO) is 5.55%.

Range Selected
Cost of equity 8.90% - 22.10% 15.50%
Tax rate 18.00% - 19.90% 18.95%
Cost of debt 4.80% - 6.30% 5.55%
WACC 4.6% - 7.1% 5.8%
WACC

CGO.TO WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta 1.13 2.94
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.90% 22.10%
Tax rate 18.00% 19.90%
Debt/Equity ratio 7.48 7.48
Cost of debt 4.80% 6.30%
After-tax WACC 4.6% 7.1%
Selected WACC 5.8%

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 (15.50%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.13) + 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.