MRC.TO WACC - Weighted Average Cost of Capital

The WACC of Morguard Corp (MRC.TO) is 6.3%.

The Cost of Equity of Morguard Corp (MRC.TO) is 16.25%.

The Cost of Debt of Morguard Corp (MRC.TO) is 5.40%.

	Range	Selected
Cost of equity	13.80% - 18.70%	16.25%
Tax rate	19.40% - 23.30%	21.35%
Cost of debt	4.00% - 6.80%	5.40%
WACC	5.0% - 7.5%	6.3%

WACC

MRC.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	2.09	2.38

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.80%	18.70%

Tax rate	19.40%	23.30%
Debt/Equity ratio	4.81	4.81
Cost of debt	4.00%	6.80%

After-tax WACC	5.0%	7.5%


Selected WACC	6.3%

MRC.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 MRC.TO:

cost_of_equity (16.25%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (2.09) + 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.