GFP.TO
GreenFirst Forest Products Inc
Price:  
4.10 
CAD
Volume:  
2,500.00
Canada | Paper & Forest Products
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GFP.TO WACC - Weighted Average Cost of Capital

The WACC of GreenFirst Forest Products Inc (GFP.TO) is 9.5%.

The Cost of Equity of GreenFirst Forest Products Inc (GFP.TO) is 7.35%.
The Cost of Debt of GreenFirst Forest Products Inc (GFP.TO) is 21.70%.

Range Selected
Cost of equity 6.30% - 8.40% 7.35%
Tax rate 9.00% - 14.10% 11.55%
Cost of debt 7.00% - 36.40% 21.70%
WACC 6.3% - 12.6% 9.5%
WACC

GFP.TO WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.62 0.7
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.30% 8.40%
Tax rate 9.00% 14.10%
Debt/Equity ratio 0.22 0.22
Cost of debt 7.00% 36.40%
After-tax WACC 6.3% 12.6%
Selected WACC 9.5%

GFP.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 GFP.TO:

cost_of_equity (7.35%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.62) + 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.