CRR.UN.TO WACC - Weighted Average Cost of Capital

The WACC of Crombie Real Estate Investment Trust (CRR.UN.TO) is 7.0%.

The Cost of Equity of Crombie Real Estate Investment Trust (CRR.UN.TO) is 10.50%.

The Cost of Debt of Crombie Real Estate Investment Trust (CRR.UN.TO) is 4.70%.

	Range	Selected
Cost of equity	8.80% - 12.20%	10.50%
Tax rate	-% - 0.10%	0.05%
Cost of debt	4.00% - 5.40%	4.70%
WACC	5.9% - 8.1%	7.0%

WACC

CRR.UN.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	1.1	1.32

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.80%	12.20%

Tax rate	-%	0.10%
Debt/Equity ratio	1.48	1.48
Cost of debt	4.00%	5.40%

After-tax WACC	5.9%	8.1%


Selected WACC	7.0%

CRR.UN.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 CRR.UN.TO:

cost_of_equity (10.50%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.1) + 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.