GSY.TO WACC - Weighted Average Cost of Capital

The WACC of goeasy Ltd (GSY.TO) is 7.7%.

The Cost of Equity of goeasy Ltd (GSY.TO) is 11.90%.

The Cost of Debt of goeasy Ltd (GSY.TO) is 6.40%.

	Range	Selected
Cost of equity	9.20% - 14.60%	11.90%
Tax rate	26.10% - 26.60%	26.35%
Cost of debt	6.30% - 6.50%	6.40%
WACC	6.6% - 8.9%	7.7%

WACC

GSY.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	1.19	1.72

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.20%	14.60%

Tax rate	26.10%	26.60%
Debt/Equity ratio	1.38	1.38
Cost of debt	6.30%	6.50%

After-tax WACC	6.6%	8.9%


Selected WACC	7.7%

GSY.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 GSY.TO:

cost_of_equity (11.90%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.19) + 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.