CSU.TO
Constellation Software Inc
Price:  
5,042.62 
CAD
Volume:  
8,750.00
Canada | Software
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CSU.TO WACC - Weighted Average Cost of Capital

The WACC of Constellation Software Inc (CSU.TO) is 8.5%.

The Cost of Equity of Constellation Software Inc (CSU.TO) is 8.85%.
The Cost of Debt of Constellation Software Inc (CSU.TO) is 5.15%.

Range Selected
Cost of equity 7.50% - 10.20% 8.85%
Tax rate 26.30% - 38.60% 32.45%
Cost of debt 4.20% - 6.10% 5.15%
WACC 7.3% - 9.8% 8.5%
WACC

CSU.TO WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.85 0.99
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.50% 10.20%
Tax rate 26.30% 38.60%
Debt/Equity ratio 0.06 0.06
Cost of debt 4.20% 6.10%
After-tax WACC 7.3% 9.8%
Selected WACC 8.5%

CSU.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 CSU.TO:

cost_of_equity (8.85%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.85) + 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.