GIL.TO
Gildan Activewear Inc
Price:  
65.45 
CAD
Volume:  
84,631.00
Canada | Textiles, Apparel & Luxury Goods
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GIL.TO WACC - Weighted Average Cost of Capital

The WACC of Gildan Activewear Inc (GIL.TO) is 7.4%.

The Cost of Equity of Gildan Activewear Inc (GIL.TO) is 8.10%.
The Cost of Debt of Gildan Activewear Inc (GIL.TO) is 4.55%.

Range Selected
Cost of equity 6.60% - 9.60% 8.10%
Tax rate 3.70% - 4.80% 4.25%
Cost of debt 4.10% - 5.00% 4.55%
WACC 6.1% - 8.7% 7.4%
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 0.68 0.89
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.60% 9.60%
Tax rate 3.70% 4.80%
Debt/Equity ratio 0.23 0.23
Cost of debt 4.10% 5.00%
After-tax WACC 6.1% 8.7%
Selected WACC 7.4%

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 (8.10%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.68) + 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.