FOOD.TO WACC - Weighted Average Cost of Capital

The WACC of Goodfood Market Corp (FOOD.TO) is 8.2%.

The Cost of Equity of Goodfood Market Corp (FOOD.TO) is 12.60%.

The Cost of Debt of Goodfood Market Corp (FOOD.TO) is 6.25%.

	Range	Selected
Cost of equity	10.40% - 14.80%	12.60%
Tax rate	0.40% - 0.90%	0.65%
Cost of debt	5.50% - 7.00%	6.25%
WACC	7.0% - 9.4%	8.2%

WACC

FOOD.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	1.42	1.75

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.40%	14.80%

Tax rate	0.40%	0.90%
Debt/Equity ratio	2.27	2.27
Cost of debt	5.50%	7.00%

After-tax WACC	7.0%	9.4%


Selected WACC	8.2%

FOOD.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 FOOD.TO:

cost_of_equity (12.60%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.42) + 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.