MPCT.UN.TO WACC - Weighted Average Cost of Capital

The WACC of Dream Impact Trust (MPCT.UN.TO) is 6.3%.

The Cost of Equity of Dream Impact Trust (MPCT.UN.TO) is 22.20%.

The Cost of Debt of Dream Impact Trust (MPCT.UN.TO) is 5.50%.

	Range	Selected
Cost of equity	19.10% - 25.30%	22.20%
Tax rate	13.90% - 21.40%	17.65%
Cost of debt	4.00% - 7.00%	5.50%
WACC	5.0% - 7.5%	6.3%

WACC

MPCT.UN.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	3.13	3.46

Additional risk adjustments	0.0%	0.5%
Cost of equity	19.10%	25.30%

Tax rate	13.90%	21.40%
Debt/Equity ratio	8.87	8.87
Cost of debt	4.00%	7.00%

After-tax WACC	5.0%	7.5%


Selected WACC	6.3%

MPCT.UN.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 MPCT.UN.TO:

cost_of_equity (22.20%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (3.13) + 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.