HLF.TO WACC - Weighted Average Cost of Capital

The WACC of High Liner Foods Inc (HLF.TO) is 5.8%.

The Cost of Equity of High Liner Foods Inc (HLF.TO) is 6.65%.

The Cost of Debt of High Liner Foods Inc (HLF.TO) is 5.50%.

	Range	Selected
Cost of equity	5.70% - 7.60%	6.65%
Tax rate	15.70% - 18.70%	17.20%
Cost of debt	5.40% - 5.60%	5.50%
WACC	5.2% - 6.4%	5.8%

WACC

HLF.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.49	0.56

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.70%	7.60%

Tax rate	15.70%	18.70%
Debt/Equity ratio	0.67	0.67
Cost of debt	5.40%	5.60%

After-tax WACC	5.2%	6.4%


Selected WACC	5.8%

HLF.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 HLF.TO:

cost_of_equity (6.65%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.49) + 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.