HOM.U.TO
BSR Real Estate Investment Trust
Price:  
13.27 
USD
Volume:  
1,200.00
United States | Equity Real Estate Investment Trusts (REITs)
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HOM.U.TO WACC - Weighted Average Cost of Capital

The WACC of BSR Real Estate Investment Trust (HOM.U.TO) is 5.7%.

The Cost of Equity of BSR Real Estate Investment Trust (HOM.U.TO) is 8.15%.
The Cost of Debt of BSR Real Estate Investment Trust (HOM.U.TO) is 5.50%.

Range Selected
Cost of equity 6.90% - 9.40% 8.15%
Tax rate 25.90% - 26.50% 26.20%
Cost of debt 4.00% - 7.00% 5.50%
WACC 4.5% - 6.8% 5.7%
WACC

HOM.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 0.82 0.93
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.90% 9.40%
Tax rate 25.90% 26.50%
Debt/Equity ratio 1.51 1.51
Cost of debt 4.00% 7.00%
After-tax WACC 4.5% 6.8%
Selected WACC 5.7%

HOM.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 HOM.U.TO:

cost_of_equity (8.15%) = risk_free_rate (3.45%) + equity_risk_premium (5.10%) * adjusted_beta (0.82) + 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.