MSRE.UN.TO
Sustainable Real Estate Dividend Fund
Price:  
7.49 
CAD
Volume:  
3,670.00
Canada | N/A
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MSRE.UN.TO WACC - Weighted Average Cost of Capital

The WACC of Sustainable Real Estate Dividend Fund (MSRE.UN.TO) is 9.2%.

The Cost of Equity of Sustainable Real Estate Dividend Fund (MSRE.UN.TO) is 9.70%.
The Cost of Debt of Sustainable Real Estate Dividend Fund (MSRE.UN.TO) is 5.00%.

Range Selected
Cost of equity 8.70% - 10.70% 9.70%
Tax rate 1.20% - 1.20% 1.20%
Cost of debt 5.00% - 5.00% 5.00%
WACC 8.3% - 10.1% 9.2%
WACC

MSRE.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 1.08 1.08
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.70% 10.70%
Tax rate 1.20% 1.20%
Debt/Equity ratio 0.12 0.12
Cost of debt 5.00% 5.00%
After-tax WACC 8.3% 10.1%
Selected WACC 9.2%

MSRE.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 MSRE.UN.TO:

cost_of_equity (9.70%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * 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.