GRT.UN.TO WACC - Weighted Average Cost of Capital

The WACC of Granite Real Estate Investment Trust (GRT.UN.TO) is 6.7%.

The Cost of Equity of Granite Real Estate Investment Trust (GRT.UN.TO) is 9.15%.

The Cost of Debt of Granite Real Estate Investment Trust (GRT.UN.TO) is 4.25%.

	Range	Selected
Cost of equity	7.50% - 10.80%	9.15%
Tax rate	11.50% - 14.50%	13.00%
Cost of debt	4.00% - 4.50%	4.25%
WACC	5.7% - 7.7%	6.7%

WACC

GRT.UN.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.85	1.08

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.50%	10.80%

Tax rate	11.50%	14.50%
Debt/Equity ratio	0.79	0.79
Cost of debt	4.00%	4.50%

After-tax WACC	5.7%	7.7%


Selected WACC	6.7%

GRT.UN.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 GRT.UN.TO:

cost_of_equity (9.15%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.85) + 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.