DND.TO WACC - Weighted Average Cost of Capital

The WACC of Dye & Durham Ltd (DND.TO) is 14.9%.

The Cost of Equity of Dye & Durham Ltd (DND.TO) is 53.15%.

The Cost of Debt of Dye & Durham Ltd (DND.TO) is 16.40%.

	Range	Selected
Cost of equity	40.90% - 65.40%	53.15%
Tax rate	14.20% - 16.60%	15.40%
Cost of debt	9.60% - 23.20%	16.40%
WACC	9.2% - 20.6%	14.9%

WACC

DND.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	7.4	10.04

Additional risk adjustments	0.0%	0.5%
Cost of equity	40.90%	65.40%

Tax rate	14.20%	16.60%
Debt/Equity ratio	35.12	35.12
Cost of debt	9.60%	23.20%

After-tax WACC	9.2%	20.6%


Selected WACC	14.9%

DND.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 DND.TO:

cost_of_equity (53.15%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (7.4) + 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.