DNTL.TO WACC - Weighted Average Cost of Capital

The WACC of dentalcorp Holdings Ltd (DNTL.TO) is 9.3%.

The Cost of Equity of dentalcorp Holdings Ltd (DNTL.TO) is 8.05%.

The Cost of Debt of dentalcorp Holdings Ltd (DNTL.TO) is 13.10%.

	Range	Selected
Cost of equity	6.80% - 9.30%	8.05%
Tax rate	14.70% - 18.10%	16.40%
Cost of debt	6.00% - 20.20%	13.10%
WACC	6.0% - 12.6%	9.3%

WACC

DNTL.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.72	0.84

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.80%	9.30%

Tax rate	14.70%	18.10%
Debt/Equity ratio	0.85	0.85
Cost of debt	6.00%	20.20%

After-tax WACC	6.0%	12.6%


Selected WACC	9.3%

DNTL.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 DNTL.TO:

cost_of_equity (8.05%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.72) + 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.