FC.TO
Firm Capital Mortgage Investment Corp
Price:  
12.3 
CAD
Volume:  
30,100
Canada | Thrifts & Mortgage Finance

FC.TO WACC - Weighted Average Cost of Capital

The WACC of Firm Capital Mortgage Investment Corp (FC.TO) is 6.4%.

The Cost of Equity of Firm Capital Mortgage Investment Corp (FC.TO) is 7.55%.
The Cost of Debt of Firm Capital Mortgage Investment Corp (FC.TO) is 5.1%.

RangeSelected
Cost of equity6.5% - 8.6%7.55%
Tax rate25.9% - 26.5%26.2%
Cost of debt4.9% - 5.3%5.1%
WACC5.6% - 7.2%6.4%
WACC

FC.TO WACC calculation

CategoryLowHigh
Long-term bond rate3.2%3.7%
Equity market risk premium5.1%6.1%
Adjusted beta0.660.74
Additional risk adjustments0.0%0.5%
Cost of equity6.5%8.6%
Tax rate25.9%26.5%
Debt/Equity ratio
0.440.44
Cost of debt4.9%5.3%
After-tax WACC5.6%7.2%
Selected WACC6.4%

FC.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 FC.TO:

cost_of_equity (7.55%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.66) + 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.