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

The WACC of Firm Capital Property Trust (FCD.UN.TO) is 5.5%.

The Cost of Equity of Firm Capital Property Trust (FCD.UN.TO) is 8.10%.

The Cost of Debt of Firm Capital Property Trust (FCD.UN.TO) is 5.20%.

	Range	Selected
Cost of equity	6.40% - 9.80%	8.10%
Tax rate	25.90% - 26.50%	26.20%
Cost of debt	4.10% - 6.30%	5.20%
WACC	4.4% - 6.7%	5.5%

WACC

FCD.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	0.64	0.92

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.40%	9.80%

Tax rate	25.90%	26.50%
Debt/Equity ratio	1.5	1.5
Cost of debt	4.10%	6.30%

After-tax WACC	4.4%	6.7%


Selected WACC	5.5%

FCD.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 FCD.UN.TO:

cost_of_equity (8.10%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.64) + 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.