FGAA.U.TO
FG Acquisition Corp
Price:  
11.87 
USD
Volume:  
190
Canada | Finance and Insurance

FGAA.U.TO WACC - Weighted Average Cost of Capital

The WACC of FG Acquisition Corp (FGAA.U.TO) is 15.0%.

The Cost of Equity of FG Acquisition Corp (FGAA.U.TO) is 26.35%.
The Cost of Debt of FG Acquisition Corp (FGAA.U.TO) is 5%.

RangeSelected
Cost of equity23.6% - 29.1%26.35%
Tax rate25.9% - 26.5%26.2%
Cost of debt5.0% - 5.0%5%
WACC13.7% - 16.4%15.0%
WACC

FGAA.U.TO WACC calculation

CategoryLowHigh
Long-term bond rate3.2%3.7%
Equity market risk premium4.6%5.6%
Adjusted beta4.454.45
Additional risk adjustments0.0%0.5%
Cost of equity23.6%29.1%
Tax rate25.9%26.5%
Debt/Equity ratio
11
Cost of debt5.0%5.0%
After-tax WACC13.7%16.4%
Selected WACC15.0%

FGAA.U.TO WACC - Detailed calculations of Beta

Debt/EquityUnlevered
PeersCompany NameratioBetabeta
FGAA.U.TOFG Acquisition Corp0.053.553.42
LowHigh
Unlevered beta3.423.42
Relevered beta6.156.15
Adjusted relevered beta4.454.45

FGAA.U.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 FGAA.U.TO:

cost_of_equity (26.35%) = risk_free_rate (3.45%) + equity_risk_premium (5.10%) * adjusted_beta (4.45) + 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.