MFI.TO WACC - Weighted Average Cost of Capital

The WACC of Maple Leaf Foods Inc (MFI.TO) is 5.9%.

The Cost of Equity of Maple Leaf Foods Inc (MFI.TO) is 6.50%.

The Cost of Debt of Maple Leaf Foods Inc (MFI.TO) is 6.85%.

	Range	Selected
Cost of equity	5.40% - 7.60%	6.50%
Tax rate	22.40% - 30.00%	26.20%
Cost of debt	5.30% - 8.40%	6.85%
WACC	4.9% - 7.0%	5.9%

WACC

MFI.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	0.57

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.40%	7.60%

Tax rate	22.40%	30.00%
Debt/Equity ratio	0.61	0.61
Cost of debt	5.30%	8.40%

After-tax WACC	4.9%	7.0%


Selected WACC	5.9%

MFI.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 MFI.TO:

cost_of_equity (6.50%) = 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.