DII.B.TO
Dorel Industries Inc
Price:  
1.34 
CAD
Volume:  
6,115.00
Canada | Household Durables
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DII.B.TO WACC - Weighted Average Cost of Capital

The WACC of Dorel Industries Inc (DII.B.TO) is 7.5%.

The Cost of Equity of Dorel Industries Inc (DII.B.TO) is 41.55%.
The Cost of Debt of Dorel Industries Inc (DII.B.TO) is 6.20%.

Range Selected
Cost of equity 34.50% - 48.60% 41.55%
Tax rate 25.90% - 26.50% 26.20%
Cost of debt 5.40% - 7.00% 6.20%
WACC 6.4% - 8.6% 7.5%
WACC

DII.B.TO WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta 6.14 7.29
Additional risk adjustments 0.0% 0.5%
Cost of equity 34.50% 48.60%
Tax rate 25.90% 26.50%
Debt/Equity ratio 11.48 11.48
Cost of debt 5.40% 7.00%
After-tax WACC 6.4% 8.6%
Selected WACC 7.5%

DII.B.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 DII.B.TO:

cost_of_equity (41.55%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (6.14) + 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.