DND.TO WACC - Weighted Average Cost of Capital

The WACC of Dye & Durham Ltd (DND.TO) is 11.1%.

The Cost of Equity of Dye & Durham Ltd (DND.TO) is 12.70%.

The Cost of Debt of Dye & Durham Ltd (DND.TO) is 12.55%.

	Range	Selected
Cost of equity	11.30% - 14.10%	12.70%
Tax rate	14.50% - 17.90%	16.20%
Cost of debt	10.20% - 14.90%	12.55%
WACC	9.5% - 12.8%	11.1%

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	1.6	1.63

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.30%	14.10%

Tax rate	14.50%	17.90%
Debt/Equity ratio	2.39	2.39
Cost of debt	10.20%	14.90%

After-tax WACC	9.5%	12.8%


Selected WACC	11.1%

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 (12.70%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.6) + 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.