HGI.UN.TO
Global Telecom & Utilities Income Fund
Price:  
7.63 
CAD
Volume:  
690
Canada | Finance and Insurance

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

The WACC of Global Telecom & Utilities Income Fund (HGI.UN.TO) is 4.0%.

The Cost of Equity of Global Telecom & Utilities Income Fund (HGI.UN.TO) is 4.9%.
The Cost of Debt of Global Telecom & Utilities Income Fund (HGI.UN.TO) is 4.25%.

RangeSelected
Cost of equity3.5% - 6.3%4.9%
Tax rate26.5% - 26.5%26.5%
Cost of debt4.0% - 4.5%4.25%
WACC3.2% - 4.8%4.0%
WACC

HGI.UN.TO WACC calculation

CategoryLowHigh
Long-term bond rate3.4%3.9%
Equity market risk premium4.7%5.7%
Adjusted beta0.030.34
Additional risk adjustments0.0%0.5%
Cost of equity3.5%6.3%
Tax rate26.5%26.5%
Debt/Equity ratio
11
Cost of debt4.0%4.5%
After-tax WACC3.2%4.8%
Selected WACC4.0%

HGI.UN.TO WACC - Detailed calculations of Beta

LowHigh
Unlevered beta-10.17
Relevered beta-0.450.01
Adjusted relevered beta0.030.34

HGI.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 HGI.UN.TO:

cost_of_equity (4.90%) = risk_free_rate (3.65%) + equity_risk_premium (5.20%) * adjusted_beta (0.03) + 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.