CHR.TO
Chorus Aviation Inc
Price:  
19.11 
CAD
Volume:  
800,017.00
Canada | Airlines
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CHR.TO WACC - Weighted Average Cost of Capital

The WACC of Chorus Aviation Inc (CHR.TO) is 6.2%.

The Cost of Equity of Chorus Aviation Inc (CHR.TO) is 8.30%.
The Cost of Debt of Chorus Aviation Inc (CHR.TO) is 5.75%.

Range Selected
Cost of equity 6.60% - 10.00% 8.30%
Tax rate 26.30% - 27.80% 27.05%
Cost of debt 4.70% - 6.80% 5.75%
WACC 5.0% - 7.4% 6.2%
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 0.67 0.96
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.60% 10.00%
Tax rate 26.30% 27.80%
Debt/Equity ratio 1.02 1.02
Cost of debt 4.70% 6.80%
After-tax WACC 5.0% 7.4%
Selected WACC 6.2%

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 (8.30%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.67) + 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.