The WACC of Middlefield Sustainable Infrastructure Dividend ETF (MINF.TO) is 18.4%.
| Range | Selected | |
| Cost of equity | 28.70% - 34.80% | 31.75% |
| Tax rate | 0.40% - 0.40% | 0.40% |
| Cost of debt | 5.00% - 5.00% | 5.00% |
| WACC | 16.9% - 19.9% | 18.4% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 5.02 | 5.02 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 28.70% | 34.80% |
| Tax rate | 0.40% | 0.40% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.00% | 5.00% |
| After-tax WACC | 16.9% | 19.9% |
| Selected WACC | 18.4% | |
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 MINF.TO:
cost_of_equity (31.75%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (5.02) + 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.