MKP.TO WACC - Weighted Average Cost of Capital

The WACC of MCAN Mortgage Corp (MKP.TO) is 13.9%.

The Cost of Equity of MCAN Mortgage Corp (MKP.TO) is 16.50%.

The Cost of Debt of MCAN Mortgage Corp (MKP.TO) is 13.60%.

	Range	Selected
Cost of equity	9.50% - 23.50%	16.50%
Tax rate	0.60% - 0.70%	0.65%
Cost of debt	4.00% - 23.20%	13.60%
WACC	4.7% - 23.1%	13.9%

WACC

MKP.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	1.24	3.17

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.50%	23.50%

Tax rate	0.60%	0.70%
Debt/Equity ratio	6.26	6.26
Cost of debt	4.00%	23.20%

After-tax WACC	4.7%	23.1%


Selected WACC	13.9%

MKP.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 MKP.TO:

cost_of_equity (16.50%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.24) + 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.