CSH.UN.TO
Chartwell Retirement Residences
Price:  
18.52 
CAD
Volume:  
243,526.00
Canada | Health Care Providers & Services
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CSH.UN.TO WACC - Weighted Average Cost of Capital

The WACC of Chartwell Retirement Residences (CSH.UN.TO) is 7.2%.

The Cost of Equity of Chartwell Retirement Residences (CSH.UN.TO) is 8.45%.
The Cost of Debt of Chartwell Retirement Residences (CSH.UN.TO) is 6.50%.

Range Selected
Cost of equity 7.30% - 9.60% 8.45%
Tax rate 24.00% - 34.60% 29.30%
Cost of debt 4.60% - 8.40% 6.50%
WACC 6.0% - 8.3% 7.2%
WACC

CSH.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 0.8 0.9
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.30% 9.60%
Tax rate 24.00% 34.60%
Debt/Equity ratio 0.48 0.48
Cost of debt 4.60% 8.40%
After-tax WACC 6.0% 8.3%
Selected WACC 7.2%

CSH.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 CSH.UN.TO:

cost_of_equity (8.45%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.8) + 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.