MPC.TO WACC - Weighted Average Cost of Capital

The WACC of Madison Pacific Properties Inc (MPC.TO) is 5.6%.

The Cost of Equity of Madison Pacific Properties Inc (MPC.TO) is 6.15%.

The Cost of Debt of Madison Pacific Properties Inc (MPC.TO) is 6.25%.

	Range	Selected
Cost of equity	5.10% - 7.20%	6.15%
Tax rate	18.70% - 20.80%	19.75%
Cost of debt	4.10% - 8.40%	6.25%
WACC	4.2% - 6.9%	5.6%

WACC

MPC.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.38	0.5

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.10%	7.20%

Tax rate	18.70%	20.80%
Debt/Equity ratio	0.96	0.96
Cost of debt	4.10%	8.40%

After-tax WACC	4.2%	6.9%


Selected WACC	5.6%

MPC.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 MPC.TO:

cost_of_equity (6.15%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.38) + 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.