The WACC of Galaxy Digital Holdings Ltd (GLXY.TO) is 6.3%.
Range | Selected | |
Cost of equity | 6.6% - 9.6% | 8.1% |
Tax rate | 8.9% - 13.9% | 11.4% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 5.6% - 6.9% | 6.3% |
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 | 6.6% | 9.6% |
Tax rate | 8.9% | 13.9% |
Debt/Equity ratio | 1 | 1 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 5.6% | 6.9% |
Selected WACC | 6.3% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
GLXY.TO | Galaxy Digital Holdings Ltd | 0.98 | 4.34 | 2.3 |
AC | Associated Capital Group Inc | 0.01 | 0.65 | 0.64 |
CVG.TO | Clairvest Group Inc | 0 | 0.25 | 0.25 |
EIT.UN.TO | Canoe EIT Income Fund | 0.1 | 1.18 | 1.08 |
FIH.U.TO | Fairfax India Holdings Corp | 0.28 | 1.33 | 1.06 |
GSBD | Goldman Sachs BDC Inc | 1.41 | 0.68 | 0.3 |
NEWT | Newtek Business Services Corp | 5.64 | 0.03 | 0 |
NMFC | New Mountain Finance Corp | 1.64 | 0.45 | 0.18 |
OCSL | Oaktree Specialty Lending Corp | 1.37 | 0.58 | 0.26 |
PAX | Patria Investments Ltd | 0.12 | 0.97 | 0.88 |
SLRC | SLR Investment Corp | 1.18 | 0.58 | 0.28 |
Low | High | |
Unlevered beta | 0.28 | 0.64 |
Relevered beta | 0.52 | 0.84 |
Adjusted relevered beta | 0.68 | 0.89 |
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 GLXY.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.