ECN.TO
ECN Capital Corp
Price:  
2.67 
CAD
Volume:  
81,840.00
Canada | Diversified Financial Services
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ECN.TO WACC - Weighted Average Cost of Capital

The WACC of ECN Capital Corp (ECN.TO) is 6.2%.

The Cost of Equity of ECN Capital Corp (ECN.TO) is 7.20%.
The Cost of Debt of ECN Capital Corp (ECN.TO) is 7.95%.

Range Selected
Cost of equity 6.00% - 8.40% 7.20%
Tax rate 27.30% - 40.00% 33.65%
Cost of debt 7.50% - 8.40% 7.95%
WACC 5.7% - 6.7% 6.2%
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 0.56 0.69
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.00% 8.40%
Tax rate 27.30% 40.00%
Debt/Equity ratio 1.05 1.05
Cost of debt 7.50% 8.40%
After-tax WACC 5.7% 6.7%
Selected WACC 6.2%

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 (7.20%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.56) + 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.