CUF.UN.TO WACC - Weighted Average Cost of Capital
The WACC of Cominar REIT (CUF.UN.TO) is 7.7%.
| Range | Selected | |
| Cost of equity | 8.9% - 11.6% | 10.25% |
| Tax rate | 0.1% - 0.2% | 0.15% |
| Cost of debt | 4.0% - 8.2% | 6.1% |
| WACC | 5.8% - 9.5% | 7.7% |
| Category | Low | High |
| Long-term bond rate | 3.4% | 3.9% |
| Equity market risk premium | 4.7% | 5.7% |
| Adjusted beta | 1.17 | 1.26 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.9% | 11.6% |
| Tax rate | 0.1% | 0.2% |
| Debt/Equity ratio | 1.65 | 1.65 |
| Cost of debt | 4.0% | 8.2% |
| After-tax WACC | 5.8% | 9.5% |
| Selected WACC | 7.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| CUF.UN.TO | Cominar REIT | 1.65 | 1.37 | 0.52 |
| AAT | American Assets Trust Inc | 1.71 | 0.67 | 0.25 |
| AHH | Armada Hoffler Properties Inc | 1.97 | 0.75 | 0.25 |
| ALEX | Alexander & Baldwin Inc (Hawaii) | 0.37 | 0.33 | 0.24 |
| AX.UN.TO | Artis Real Estate Investment Trust | 1.6 | 0.8 | 0.31 |
| ESRT | Empire State Realty Trust Inc | 2.01 | 0.76 | 0.25 |
| GNL | Global Net Lease Inc | 2.44 | 0.16 | 0.05 |
| GOOD | Gladstone Commercial Corp | 1.01 | 0.58 | 0.29 |
| STAR | iStar Inc | 2.54 | 1.28 | 0.36 |
| WRE | Washington Real Estate Investment Trust | 0.36 | 0.89 | 0.66 |
| Low | High | |
| Unlevered beta | 0.25 | 0.3 |
| Relevered beta | 1.25 | 1.39 |
| Adjusted relevered beta | 1.17 | 1.26 |
CUF.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 CUF.UN.TO:
cost_of_equity (10.25%) = risk_free_rate (3.65%) + equity_risk_premium (5.20%) * adjusted_beta (1.17) + 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.