MRTI WACC - Weighted Average Cost of Capital
The WACC of Maxus Realty Trust Inc (MRTI) is 10.4%.
| Range | Selected | |
| Cost of equity | 8.8% - 13.5% | 11.15% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 6.9% - 20.9% | 13.9% |
| WACC | 6.0% - 14.8% | 10.4% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.08 | 1.54 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.8% | 13.5% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 2.99 | 2.99 |
| Cost of debt | 6.9% | 20.9% |
| After-tax WACC | 6.0% | 14.8% |
| Selected WACC | 10.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| MRTI | Maxus Realty Trust Inc | 2.99 | 0.32 | 0.1 |
| BEI.UN.TO | Boardwalk Real Estate Investment Trust | 0.96 | 1.28 | 0.75 |
| BRT | BRT Apartments Corp | 1.68 | 0.85 | 0.38 |
| CLPR | Clipper Realty Inc | 19.27 | 0.34 | 0.02 |
| ERE.UN.TO | European Residential REIT | 2.31 | 1.42 | 0.53 |
| FCA.UN.V | Firm Capital Apartment Real Estate Investment Trust | 1.34 | 0.14 | 0.07 |
| FCD.UN.V | Firm Capital Property Trust | 1.1 | 1.25 | 0.69 |
| IIP.UN.TO | InterRent Real Estate Investment Trust | 0.9 | 1.2 | 0.73 |
| KMP.UN.TO | Killam Apartment REIT | 0.96 | 1.06 | 0.63 |
| MRG.UN.TO | Morguard North American Residential Real Estate Investment Trust | 2.79 | 0.92 | 0.3 |
| Low | High | |
| Unlevered beta | 0.35 | 0.57 |
| Relevered beta | 1.12 | 1.81 |
| Adjusted relevered beta | 1.08 | 1.54 |
MRTI'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 MRTI:
cost_of_equity (11.15%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.08) + 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.