DLCG.V WACC - Weighted Average Cost of Capital
The WACC of Dominion Lending Centres Inc (DLCG.V) is 6.8%.
| Range | Selected | |
| Cost of equity | 7.9% - 10.9% | 9.4% |
| Tax rate | 27.0% - 27.0% | 27% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.0% - 7.6% | 6.8% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 4.7% | 5.7% |
| Adjusted beta | 1.01 | 1.18 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.9% | 10.9% |
| Tax rate | 27.0% | 27.0% |
| Debt/Equity ratio | 0.83 | 0.83 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.0% | 7.6% |
| Selected WACC | 6.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| DLCG.V | Dominion Lending Centres Inc | 0.83 | 1.51 | 0.94 |
| BKCC | BlackRock Capital Investment Corp | 1.09 | 0.53 | 0.3 |
| FDUS | Fidus Investment Corp | 0.65 | 0.48 | 0.32 |
| HGBL | Heritage Global Inc | 0 | 0.14 | 0.14 |
| MDLY | Medley Management Inc | 3.9 | 1.78 | 0.46 |
| MRCC | Monroe Capital Corp | 2.1 | 0.54 | 0.21 |
| OFS | OFS Capital Corp | 2.18 | 0.15 | 0.06 |
| PTMN | Portman Ridge Finance Corp | 2.3 | 0.33 | 0.13 |
| SAR | Saratoga Investment Corp | 2.04 | 0.42 | 0.17 |
| SCM | Stellus Capital Investment Corp | 1.45 | 0.55 | 0.27 |
| Low | High | |
| Unlevered beta | 0.19 | 0.28 |
| Relevered beta | 1.01 | 1.27 |
| Adjusted relevered beta | 1.01 | 1.18 |
DLCG.V'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 DLCG.V:
cost_of_equity (9.40%) = risk_free_rate (3.45%) + equity_risk_premium (5.20%) * adjusted_beta (1.01) + 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.