CLS.TO WACC - Weighted Average Cost of Capital

The WACC of Celestica Inc (CLS.TO) is 9.4%.

The Cost of Equity of Celestica Inc (CLS.TO) is 9.75%.

The Cost of Debt of Celestica Inc (CLS.TO) is 5.40%.

	Range	Selected
Cost of equity	8.10% - 11.40%	9.75%
Tax rate	22.20% - 25.60%	23.90%
Cost of debt	4.00% - 6.80%	5.40%
WACC	7.8% - 11.0%	9.4%

WACC

CLS.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.97	1.19

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.10%	11.40%

Tax rate	22.20%	25.60%
Debt/Equity ratio	0.07	0.07
Cost of debt	4.00%	6.80%

After-tax WACC	7.8%	11.0%


Selected WACC	9.4%

CLS.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 CLS.TO:

cost_of_equity (9.75%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.97) + 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.