MDF.TO
mdf Commerce Inc
Price:  
5.80 
CAD
Volume:  
34,363.00
Canada | Interactive Media & Services
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MDF.TO WACC - Weighted Average Cost of Capital

The WACC of mdf Commerce Inc (MDF.TO) is 6.2%.

The Cost of Equity of mdf Commerce Inc (MDF.TO) is 6.25%.
The Cost of Debt of mdf Commerce Inc (MDF.TO) is 5.60%.

Range Selected
Cost of equity 5.40% - 7.10% 6.25%
Tax rate 14.90% - 18.90% 16.90%
Cost of debt 4.20% - 7.00% 5.60%
WACC 5.3% - 7.1% 6.2%
WACC

MDF.TO WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.44 0.49
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.40% 7.10%
Tax rate 14.90% 18.90%
Debt/Equity ratio 0.04 0.04
Cost of debt 4.20% 7.00%
After-tax WACC 5.3% 7.1%
Selected WACC 6.2%

MDF.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 MDF.TO:

cost_of_equity (6.25%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.44) + 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.