ENI.UN.TO WACC - Weighted Average Cost of Capital

The WACC of Energy Income Fund (ENI.UN.TO) is 5.8%.

The Cost of Equity of Energy Income Fund (ENI.UN.TO) is 7.30%.

The Cost of Debt of Energy Income Fund (ENI.UN.TO) is 4.25%.

	Range	Selected
Cost of equity	5.20% - 9.40%	7.30%
Tax rate	0.70% - 1.40%	1.05%
Cost of debt	4.00% - 4.50%	4.25%
WACC	4.6% - 6.9%	5.8%

WACC

ENI.UN.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.4	0.86

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.20%	9.40%

Tax rate	0.70%	1.40%
Debt/Equity ratio	1	1
Cost of debt	4.00%	4.50%

After-tax WACC	4.6%	6.9%


Selected WACC	5.8%

ENI.UN.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 ENI.UN.TO:

cost_of_equity (7.30%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.4) + 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.