GCG.TO
Guardian Capital Group Ltd
Price:  
43.08 
CAD
Volume:  
100
Canada | Capital Markets

GCG.TO WACC - Weighted Average Cost of Capital

The WACC of Guardian Capital Group Ltd (GCG.TO) is 7.7%.

The Cost of Equity of Guardian Capital Group Ltd (GCG.TO) is 8%.
The Cost of Debt of Guardian Capital Group Ltd (GCG.TO) is 5%.

RangeSelected
Cost of equity6.7% - 9.3%8%
Tax rate13.7% - 14.5%14.1%
Cost of debt5.0% - 5.0%5%
WACC6.5% - 8.8%7.7%
WACC

GCG.TO WACC calculation

CategoryLowHigh
Long-term bond rate2.4%2.9%
Equity market risk premium4.7%5.7%
Adjusted beta0.911.03
Additional risk adjustments0.0%0.5%
Cost of equity6.7%9.3%
Tax rate13.7%14.5%
Debt/Equity ratio
0.110.11
Cost of debt5.0%5.0%
After-tax WACC6.5%8.8%
Selected WACC7.7%

GCG.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 GCG.TO:

cost_of_equity (8.00%) = risk_free_rate (2.65%) + equity_risk_premium (5.20%) * adjusted_beta (0.91) + 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.