FCR.UN.TO WACC - Weighted Average Cost of Capital
The WACC of First Capital Real Estate Investment Trust (FCR.UN.TO) is 6.8%.
| Range | Selected | |
| Cost of equity | 7.6% - 10.0% | 8.8% |
| Tax rate | 5.0% - 5.7% | 5.35% |
| Cost of debt | 4.0% - 6.3% | 5.15% |
| WACC | 5.7% - 7.9% | 6.8% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.88 | 0.96 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.6% | 10.0% |
| Tax rate | 5.0% | 5.7% |
| Debt/Equity ratio | 1.06 | 1.06 |
| Cost of debt | 4.0% | 6.3% |
| After-tax WACC | 5.7% | 7.9% |
| Selected WACC | 6.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| FCR.UN.TO | First Capital Real Estate Investment Trust | 1.06 | 1.06 | 0.53 |
| CRT.UN.TO | CT Real Estate Investment Trust | 1.78 | 0.98 | 0.37 |
| MAC | Macerich Co | 1.21 | 1.17 | 0.54 |
| ROIC | Retail Opportunity Investments Corp | 0.62 | 0.3 | 0.19 |
| RPAI | Retail Properties of America Inc | 0.62 | 1.74 | 1.1 |
| SITC | Site Centers Corp | 0.5 | 0.56 | 0.38 |
| SKT | Tanger Factory Outlet Centers Inc | 0.39 | 0.53 | 0.39 |
| SRU.UN.TO | SmartCentres Real Estate Investment Trust | 1.36 | 0.97 | 0.42 |
| UE | Urban Edge Properties | 0.68 | 0.7 | 0.43 |
| WRI | Weingarten Realty Investors | 0.46 | 1.61 | 1.12 |
| Low | High | |
| Unlevered beta | 0.41 | 0.47 |
| Relevered beta | 0.82 | 0.94 |
| Adjusted relevered beta | 0.88 | 0.96 |
FCR.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 FCR.UN.TO:
cost_of_equity (8.80%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.88) + 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.