CHR.TO WACC - Weighted Average Cost of Capital

The WACC of Chorus Aviation Inc (CHR.TO) is 7.2%.

The Cost of Equity of Chorus Aviation Inc (CHR.TO) is 8.45%.

The Cost of Debt of Chorus Aviation Inc (CHR.TO) is 8.20%.

	Range	Selected
Cost of equity	6.70% - 10.20%	8.45%
Tax rate	26.30% - 27.80%	27.05%
Cost of debt	4.70% - 11.70%	8.20%
WACC	5.1% - 9.3%	7.2%

WACC

CHR.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.69	0.98

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.70%	10.20%

Tax rate	26.30%	27.80%
Debt/Equity ratio	0.94	0.94
Cost of debt	4.70%	11.70%

After-tax WACC	5.1%	9.3%


Selected WACC	7.2%

CHR.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 CHR.TO:

cost_of_equity (8.45%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.69) + 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.