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

The WACC of Inovalis Real Estate Investment Trust (INO.UN.TO) is 11.6%.

The Cost of Equity of Inovalis Real Estate Investment Trust (INO.UN.TO) is 9.25%.

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

	Range	Selected
Cost of equity	7.90% - 10.60%	9.25%
Tax rate	1.40% - 1.80%	1.60%
Cost of debt	4.00% - 20.20%	12.10%
WACC	4.4% - 18.8%	11.6%

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	0.93	1.05

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.90%	10.60%

Tax rate	1.40%	1.80%
Debt/Equity ratio	8.01	8.01
Cost of debt	4.00%	20.20%

After-tax WACC	4.4%	18.8%


Selected WACC	11.6%

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 (9.25%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.93) + 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.