D.UN.TO
Dream Office Real Estate Investment Trust
Price:  
15.01 
CAD
Volume:  
7,321.00
Canada | Equity Real Estate Investment Trusts (REITs)
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D.UN.TO WACC - Weighted Average Cost of Capital

The WACC of Dream Office Real Estate Investment Trust (D.UN.TO) is 9.1%.

The Cost of Equity of Dream Office Real Estate Investment Trust (D.UN.TO) is 6.90%.
The Cost of Debt of Dream Office Real Estate Investment Trust (D.UN.TO) is 9.65%.

Range Selected
Cost of equity 5.40% - 8.40% 6.90%
Tax rate 0.50% - 0.90% 0.70%
Cost of debt 4.40% - 14.90% 9.65%
WACC 4.5% - 13.8% 9.1%
WACC

D.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 0.44 0.7
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.40% 8.40%
Tax rate 0.50% 0.90%
Debt/Equity ratio 5.21 5.21
Cost of debt 4.40% 14.90%
After-tax WACC 4.5% 13.8%
Selected WACC 9.1%

D.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 D.UN.TO:

cost_of_equity (6.90%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.44) + 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.