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

The WACC of First Capital Real Estate Investment Trust (FCR.UN.TO) is 6.7%.

The Cost of Equity of First Capital Real Estate Investment Trust (FCR.UN.TO) is 8.70%.

The Cost of Debt of First Capital Real Estate Investment Trust (FCR.UN.TO) is 5.15%.

	Range	Selected
Cost of equity	7.50% - 9.90%	8.70%
Tax rate	5.00% - 5.70%	5.35%
Cost of debt	4.00% - 6.30%	5.15%
WACC	5.5% - 7.8%	6.7%

WACC

FCR.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	0.85	0.94

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.50%	9.90%

Tax rate	5.00%	5.70%
Debt/Equity ratio	1.11	1.11
Cost of debt	4.00%	6.30%

After-tax WACC	5.5%	7.8%


Selected WACC	6.7%

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 (8.70%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.85) + 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.