GFP.TO WACC - Weighted Average Cost of Capital

The WACC of GreenFirst Forest Products Inc (GFP.TO) is 10.8%.

The Cost of Equity of GreenFirst Forest Products Inc (GFP.TO) is 8.05%.

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

	Range	Selected
Cost of equity	6.90% - 9.20%	8.05%
Tax rate	9.00% - 14.10%	11.55%
Cost of debt	7.00% - 36.40%	21.70%
WACC	6.7% - 14.9%	10.8%

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	0.72	0.82

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.90%	9.20%

Tax rate	9.00%	14.10%
Debt/Equity ratio	0.35	0.35
Cost of debt	7.00%	36.40%

After-tax WACC	6.7%	14.9%


Selected WACC	10.8%

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 (8.05%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.72) + 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.