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

The WACC of Inovalis Real Estate Investment Trust (INO.UN.TO) is 11.3%.

The Cost of Equity of Inovalis Real Estate Investment Trust (INO.UN.TO) is 7.35%.

The Cost of Debt of Inovalis Real Estate Investment Trust (INO.UN.TO) is 12.10%.

	Range	Selected
Cost of equity	5.60% - 9.10%	7.35%
Tax rate	1.60% - 2.00%	1.80%
Cost of debt	4.00% - 20.20%	12.10%
WACC	4.1% - 18.5%	11.3%

WACC

INO.UN.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.48	0.81

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.60%	9.10%

Tax rate	1.60%	2.00%
Debt/Equity ratio	7.18	7.18
Cost of debt	4.00%	20.20%

After-tax WACC	4.1%	18.5%


Selected WACC	11.3%

INO.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 INO.UN.TO:

cost_of_equity (7.35%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.48) + 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.