MSI.TO
Morneau Shepell Inc
Price:  
33.58 
CAD
Volume:  
111,000.00
Canada | Professional Services
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MSI.TO WACC - Weighted Average Cost of Capital

The WACC of Morneau Shepell Inc (MSI.TO) is 8.4%.

The Cost of Equity of Morneau Shepell Inc (MSI.TO) is 9.65%.
The Cost of Debt of Morneau Shepell Inc (MSI.TO) is 5.00%.

Range Selected
Cost of equity 8.10% - 11.20% 9.65%
Tax rate 31.20% - 32.40% 31.80%
Cost of debt 5.00% - 5.00% 5.00%
WACC 7.2% - 9.7% 8.4%
WACC

MSI.TO WACC calculation

Category Low High
Long-term bond rate 3.4% 3.9%
Equity market risk premium 4.7% 5.7%
Adjusted beta 1 1.19
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.10% 11.20%
Tax rate 31.20% 32.40%
Debt/Equity ratio 0.25 0.25
Cost of debt 5.00% 5.00%
After-tax WACC 7.2% 9.7%
Selected WACC 8.4%

MSI.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 MSI.TO:

cost_of_equity (9.65%) = risk_free_rate (3.65%) + equity_risk_premium (5.20%) * adjusted_beta (1) + 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.