MSC.BK WACC - Weighted Average Cost of Capital

The WACC of Metro Systems Corporation PCL (MSC.BK) is 9.0%.

The Cost of Equity of Metro Systems Corporation PCL (MSC.BK) is 10.40%.

The Cost of Debt of Metro Systems Corporation PCL (MSC.BK) is 5.55%.

	Range	Selected
Cost of equity	9.20% - 11.60%	10.40%
Tax rate	19.70% - 19.90%	19.80%
Cost of debt	4.00% - 7.10%	5.55%
WACC	7.8% - 10.2%	9.0%

WACC

MSC.BK WACC calculation

Category	Low	High

Long-term bond rate	2.6%	3.1%
Equity market risk premium	7.4%	8.4%
Adjusted beta	0.89	0.95

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.20%	11.60%

Tax rate	19.70%	19.90%
Debt/Equity ratio	0.29	0.29
Cost of debt	4.00%	7.10%

After-tax WACC	7.8%	10.2%


Selected WACC	9.0%

MSC.BK'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 MSC.BK:

cost_of_equity (10.40%) = risk_free_rate (2.85%) + equity_risk_premium (7.90%) * adjusted_beta (0.89) + 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.