GDL.TO WACC - Weighted Average Cost of Capital
The WACC of Goodfellow Inc (GDL.TO) is 8.9%.
| Range | Selected | |
| Cost of equity | 8.5% - 11.7% | 10.1% |
| Tax rate | 26.5% - 26.9% | 26.7% |
| Cost of debt | 4.1% - 8.2% | 6.15% |
| WACC | 7.3% - 10.5% | 8.9% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 1.05 | 1.23 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.5% | 11.7% |
| Tax rate | 26.5% | 26.9% |
| Debt/Equity ratio | 0.27 | 0.27 |
| Cost of debt | 4.1% | 8.2% |
| After-tax WACC | 7.3% | 10.5% |
| Selected WACC | 8.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| GDL.TO | Goodfellow Inc | 0.27 | 0.58 | 0.49 |
| BRY.TO | Bri-Chem Corp | 3.42 | 0.49 | 0.14 |
| CCOM | CCOM Group Inc | 0.38 | 0.34 | 0.27 |
| CERV.TO | Cervus Equipment Corp | 0.59 | 1.76 | 1.23 |
| DNOW | NOW Inc | 0.02 | 1.28 | 1.27 |
| DXPE | DXP Enterprises Inc | 0.48 | 1.75 | 1.29 |
| EVI | EVI Industries Inc | 0.06 | 0.72 | 0.69 |
| HWCC | Houston Wire & Cable Co | 0.37 | 1.35 | 1.07 |
| LAWS | Lawson Products Inc | 0.02 | 1.05 | 1.03 |
| MRC | MRC Global Inc | 0.38 | 1.55 | 1.22 |
| Low | High | |
| Unlevered beta | 0.9 | 1.13 |
| Relevered beta | 1.07 | 1.34 |
| Adjusted relevered beta | 1.05 | 1.23 |
GDL.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 GDL.TO:
cost_of_equity (10.10%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.05) + 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.