FOOD.TO WACC - Weighted Average Cost of Capital

The WACC of Goodfood Market Corp (FOOD.TO) is 7.1%.

The Cost of Equity of Goodfood Market Corp (FOOD.TO) is 12.50%.

The Cost of Debt of Goodfood Market Corp (FOOD.TO) is 5.95%.

	Range	Selected
Cost of equity	10.60% - 14.40%	12.50%
Tax rate	1.00% - 1.40%	1.20%
Cost of debt	4.90% - 7.00%	5.95%
WACC	5.9% - 8.3%	7.1%

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	1.45	1.68

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.60%	14.40%

Tax rate	1.00%	1.40%
Debt/Equity ratio	4.33	4.33
Cost of debt	4.90%	7.00%

After-tax WACC	5.9%	8.3%


Selected WACC	7.1%

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 (12.50%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.45) + 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.