MAL.TO WACC - Weighted Average Cost of Capital
The WACC of Magellan Aerospace Corp (MAL.TO) is 7.8%.
| Range | Selected | |
| Cost of equity | 7.1% - 9.4% | 8.25% |
| Tax rate | 25.9% - 26.5% | 26.2% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 6.7% - 8.9% | 7.8% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.76 | 0.86 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.1% | 9.4% |
| Tax rate | 25.9% | 26.5% |
| Debt/Equity ratio | 0.09 | 0.09 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 6.7% | 8.9% |
| Selected WACC | 7.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| MAL.TO | Magellan Aerospace Corp | 0.09 | 1.22 | 1.15 |
| ATRO | Astronics Corp | 0.16 | 0.66 | 0.59 |
| AVP.TO | Avcorp Industries Inc | 2.66 | 1.84 | 0.62 |
| BUKS | Butler National Corp | 0.34 | 1.07 | 0.86 |
| CVU | CPI Aerostructures Inc | 0.43 | 1.05 | 0.8 |
| DCO | Ducommun Inc | 0.24 | 0.84 | 0.71 |
| HRX.TO | Heroux Devtek Inc | 0.2 | 0.21 | 0.18 |
| KAMN | Kaman Corp | 0.43 | 1.44 | 1.09 |
| SIF | SIFCO Industries Inc | 1.29 | 0.91 | 0.47 |
| TATT | TAT Technologies Ltd | 0.05 | 0.56 | 0.54 |
| Low | High | |
| Unlevered beta | 0.61 | 0.75 |
| Relevered beta | 0.64 | 0.79 |
| Adjusted relevered beta | 0.76 | 0.86 |
MAL.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 MAL.TO:
cost_of_equity (8.25%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.76) + 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.