EFN.TO WACC - Weighted Average Cost of Capital
The WACC of Element Fleet Management Corp (EFN.TO) is 7.7%.
| Range | Selected | |
| Cost of equity | 5.6% - 7.5% | 6.55% |
| Tax rate | 22.7% - 23.7% | 23.2% |
| Cost of debt | 5.0% - 20.2% | 12.6% |
| WACC | 4.9% - 10.6% | 7.7% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.47 | 0.54 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.6% | 7.5% |
| Tax rate | 22.7% | 23.7% |
| Debt/Equity ratio | 0.65 | 0.65 |
| Cost of debt | 5.0% | 20.2% |
| After-tax WACC | 4.9% | 10.6% |
| Selected WACC | 7.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| EFN.TO | Element Fleet Management Corp | 0.65 | 0.92 | 0.61 |
| KLNMA.IS | Turkiye Kalkinma ve Yatirim Bankasi AS | 0.81 | -0.36 | -0.22 |
| ACD.TO | Accord Financial Corp | 11.63 | 0.59 | 0.06 |
| BCF.V | Builders Capital Mortgage Corp | 0.17 | 0.27 | 0.24 |
| BLX | Foreign Trade Bank of Latin America Inc | 3.04 | 0.66 | 0.2 |
| ECN.TO | ECN Capital Corp | 1.05 | 0.93 | 0.52 |
| GWGH | GWG Holdings Inc | 29.86 | 0.05 | 0 |
| MRLN | Marlin Business Services Corp | 2.69 | 1 | 0.33 |
| SUND | Sundance Strategies Inc | 0.25 | 0.17 | 0.14 |
| SWKH | SWK Holdings Corp | 0.22 | 0.17 | 0.14 |
| Low | High | |
| Unlevered beta | 0.14 | 0.21 |
| Relevered beta | 0.21 | 0.31 |
| Adjusted relevered beta | 0.47 | 0.54 |
EFN.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 EFN.TO:
cost_of_equity (6.55%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.47) + 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.