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

The WACC of Inovalis Real Estate Investment Trust (INO.UN.TO) is 9.1%.

The Cost of Equity of Inovalis Real Estate Investment Trust (INO.UN.TO) is 7.55%.

The Cost of Debt of Inovalis Real Estate Investment Trust (INO.UN.TO) is 9.45%.

	Range	Selected
Cost of equity	6.20% - 8.90%	7.55%
Tax rate	1.40% - 1.80%	1.60%
Cost of debt	4.00% - 14.90%	9.45%
WACC	4.2% - 13.9%	9.1%

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	0.6	0.78

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.20%	8.90%

Tax rate	1.40%	1.80%
Debt/Equity ratio	6.49	6.49
Cost of debt	4.00%	14.90%

After-tax WACC	4.2%	13.9%


Selected WACC	9.1%

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 (7.55%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.6) + 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.