MEQ.TO WACC - Weighted Average Cost of Capital

The WACC of Mainstreet Equity Corp (MEQ.TO) is 6.3%.

The Cost of Equity of Mainstreet Equity Corp (MEQ.TO) is 8.85%.

The Cost of Debt of Mainstreet Equity Corp (MEQ.TO) is 5.00%.

	Range	Selected
Cost of equity	7.40% - 10.30%	8.85%
Tax rate	15.80% - 15.90%	15.85%
Cost of debt	5.00% - 5.00%	5.00%
WACC	5.7% - 7.0%	6.3%

WACC

MEQ.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.83	1.01

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.40%	10.30%

Tax rate	15.80%	15.90%
Debt/Equity ratio	1.18	1.18
Cost of debt	5.00%	5.00%

After-tax WACC	5.7%	7.0%


Selected WACC	6.3%

MEQ.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 MEQ.TO:

cost_of_equity (8.85%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.83) + 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.