EIF.TO
Exchange Income Corp
Price:  
51.99 
CAD
Volume:  
36,496.00
Canada | Airlines
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EIF.TO WACC - Weighted Average Cost of Capital

The WACC of Exchange Income Corp (EIF.TO) is 7.1%.

The Cost of Equity of Exchange Income Corp (EIF.TO) is 9.75%.
The Cost of Debt of Exchange Income Corp (EIF.TO) is 5.60%.

Range Selected
Cost of equity 8.10% - 11.40% 9.75%
Tax rate 27.50% - 27.70% 27.60%
Cost of debt 4.90% - 6.30% 5.60%
WACC 6.0% - 8.2% 7.1%
WACC

EIF.TO WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.98 1.19
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.10% 11.40%
Tax rate 27.50% 27.70%
Debt/Equity ratio 0.87 0.87
Cost of debt 4.90% 6.30%
After-tax WACC 6.0% 8.2%
Selected WACC 7.1%

EIF.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 EIF.TO:

cost_of_equity (9.75%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.98) + 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.