IAG.TO
iA Financial Corporation Inc
Price:  
134.46 
CAD
Volume:  
81,249.00
Canada | Insurance
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IAG.TO WACC - Weighted Average Cost of Capital

The WACC of iA Financial Corporation Inc (IAG.TO) is 8.3%.

The Cost of Equity of iA Financial Corporation Inc (IAG.TO) is 8.90%.
The Cost of Debt of iA Financial Corporation Inc (IAG.TO) is 5.00%.

Range Selected
Cost of equity 7.20% - 10.60% 8.90%
Tax rate 19.50% - 21.40% 20.45%
Cost of debt 5.00% - 5.00% 5.00%
WACC 6.8% - 9.7% 8.3%
WACC

IAG.TO WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.8 1.06
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.20% 10.60%
Tax rate 19.50% 21.40%
Debt/Equity ratio 0.16 0.16
Cost of debt 5.00% 5.00%
After-tax WACC 6.8% 9.7%
Selected WACC 8.3%

IAG.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 IAG.TO:

cost_of_equity (8.90%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.8) + 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.