MTL.TO WACC - Weighted Average Cost of Capital

The WACC of Mullen Group Ltd (MTL.TO) is 7.4%.

The Cost of Equity of Mullen Group Ltd (MTL.TO) is 9.50%.

The Cost of Debt of Mullen Group Ltd (MTL.TO) is 5.35%.

	Range	Selected
Cost of equity	8.30% - 10.70%	9.50%
Tax rate	24.70% - 25.00%	24.85%
Cost of debt	5.30% - 5.40%	5.35%
WACC	6.6% - 8.1%	7.4%

WACC

MTL.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	1.08

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.30%	10.70%

Tax rate	24.70%	25.00%
Debt/Equity ratio	0.64	0.64
Cost of debt	5.30%	5.40%

After-tax WACC	6.6%	8.1%


Selected WACC	7.4%

MTL.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 MTL.TO:

cost_of_equity (9.50%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * 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.