ECN.TO WACC - Weighted Average Cost of Capital

The WACC of ECN Capital Corp (ECN.TO) is 7.2%.

The Cost of Equity of ECN Capital Corp (ECN.TO) is 9.35%.

The Cost of Debt of ECN Capital Corp (ECN.TO) is 7.95%.

	Range	Selected
Cost of equity	6.60% - 12.10%	9.35%
Tax rate	27.30% - 40.00%	33.65%
Cost of debt	7.50% - 8.40%	7.95%
WACC	6.0% - 8.4%	7.2%

WACC

ECN.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.67	1.31

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.60%	12.10%

Tax rate	27.30%	40.00%
Debt/Equity ratio	1.09	1.09
Cost of debt	7.50%	8.40%

After-tax WACC	6.0%	8.4%


Selected WACC	7.2%

ECN.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 ECN.TO:

cost_of_equity (9.35%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.67) + 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.