FLOW.TO WACC - Weighted Average Cost of Capital

The WACC of Flow Beverage Corp (FLOW.TO) is 5.8%.

The Cost of Equity of Flow Beverage Corp (FLOW.TO) is 14.95%.

The Cost of Debt of Flow Beverage Corp (FLOW.TO) is 7.00%.

	Range	Selected
Cost of equity	5.30% - 24.60%	14.95%
Tax rate	25.90% - 26.50%	26.20%
Cost of debt	7.00% - 7.00%	7.00%
WACC	5.2% - 6.3%	5.8%

WACC

FLOW.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	-0.07	2.95

Additional risk adjustments	2.5%	3.0%
Cost of equity	5.30%	24.60%

Tax rate	25.90%	26.50%
Debt/Equity ratio	15.43	15.43
Cost of debt	7.00%	7.00%

After-tax WACC	5.2%	6.3%


Selected WACC	5.8%

FLOW.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 FLOW.TO:

cost_of_equity (14.95%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (-0.07) + risk_adjustments (2.75%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.