EFX.TO
Enerflex Ltd
Price:  
10.72 
CAD
Volume:  
117,861.00
Canada | Energy Equipment & Services
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EFX.TO WACC - Weighted Average Cost of Capital

The WACC of Enerflex Ltd (EFX.TO) is 9.3%.

The Cost of Equity of Enerflex Ltd (EFX.TO) is 11.90%.
The Cost of Debt of Enerflex Ltd (EFX.TO) is 6.55%.

Range Selected
Cost of equity 10.30% - 13.50% 11.90%
Tax rate 25.90% - 26.50% 26.20%
Cost of debt 6.30% - 6.80% 6.55%
WACC 8.2% - 10.4% 9.3%
WACC

EFX.TO WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta 1.39 1.53
Additional risk adjustments 0.0% 0.5%
Cost of equity 10.30% 13.50%
Tax rate 25.90% 26.50%
Debt/Equity ratio 0.57 0.57
Cost of debt 6.30% 6.80%
After-tax WACC 8.2% 10.4%
Selected WACC 9.3%

EFX.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 EFX.TO:

cost_of_equity (11.90%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.39) + 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.