GIL.TO WACC - Weighted Average Cost of Capital

The WACC of Gildan Activewear Inc (GIL.TO) is 8.9%.

The Cost of Equity of Gildan Activewear Inc (GIL.TO) is 10.70%.

The Cost of Debt of Gildan Activewear Inc (GIL.TO) is 5.25%.

	Range	Selected
Cost of equity	9.20% - 12.20%	10.70%
Tax rate	5.00% - 9.80%	7.40%
Cost of debt	4.40% - 6.10%	5.25%
WACC	7.7% - 10.2%	8.9%

WACC

GIL.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	1.18	1.33

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.20%	12.20%

Tax rate	5.00%	9.80%
Debt/Equity ratio	0.43	0.43
Cost of debt	4.40%	6.10%

After-tax WACC	7.7%	10.2%


Selected WACC	8.9%

GIL.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 GIL.TO:

cost_of_equity (10.70%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.18) + 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.