HFPC.U.TO WACC - Weighted Average Cost of Capital

The WACC of Helios Fairfax Partners Corp (HFPC.U.TO) is 6.9%.

The Cost of Equity of Helios Fairfax Partners Corp (HFPC.U.TO) is 7.15%.

The Cost of Debt of Helios Fairfax Partners Corp (HFPC.U.TO) is 4.25%.

	Range	Selected
Cost of equity	6.10% - 8.20%	7.15%
Tax rate	8.60% - 10.20%	9.40%
Cost of debt	4.00% - 4.50%	4.25%
WACC	5.9% - 7.9%	6.9%

WACC

HFPC.U.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	4.6%	5.6%
Adjusted beta	0.64	0.72

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.10%	8.20%

Tax rate	8.60%	10.20%
Debt/Equity ratio	0.08	0.08
Cost of debt	4.00%	4.50%

After-tax WACC	5.9%	7.9%


Selected WACC	6.9%

HFPC.U.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 HFPC.U.TO:

cost_of_equity (7.15%) = risk_free_rate (3.45%) + equity_risk_premium (5.10%) * adjusted_beta (0.64) + 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.