GBC.CN
Greenbank Capital Inc
Price:  
0.02 
CAD
Volume:  
48,257
Canada | Capital Markets

GBC.CN WACC - Weighted Average Cost of Capital

The WACC of Greenbank Capital Inc (GBC.CN) is 4.2%.

The Cost of Equity of Greenbank Capital Inc (GBC.CN) is 5.4%.
The Cost of Debt of Greenbank Capital Inc (GBC.CN) is 5%.

RangeSelected
Cost of equity4.6% - 6.2%5.4%
Tax rate25.9% - 26.5%26.2%
Cost of debt5.0% - 5.0%5%
WACC4.0% - 4.4%4.2%
WACC

GBC.CN WACC calculation

CategoryLowHigh
Long-term bond rate3.2%3.7%
Equity market risk premium5.1%6.1%
Adjusted beta0.290.33
Additional risk adjustments0.0%0.5%
Cost of equity4.6%6.2%
Tax rate25.9%26.5%
Debt/Equity ratio
2.622.62
Cost of debt5.0%5.0%
After-tax WACC4.0%4.4%
Selected WACC4.2%

GBC.CN'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 GBC.CN:

cost_of_equity (5.40%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.29) + 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.