MPC.TO
Madison Pacific Properties Inc
Price:  
5.50 
CAD
Volume:  
100.00
Canada | Real Estate Management & Development
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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 0.37 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 (0.37) + 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.