MTL.TO WACC - Weighted Average Cost of Capital

The WACC of Mullen Group Ltd (MTL.TO) is 7.0%.

The Cost of Equity of Mullen Group Ltd (MTL.TO) is 9.95%.

The Cost of Debt of Mullen Group Ltd (MTL.TO) is 4.80%.

	Range	Selected
Cost of equity	8.80% - 11.10%	9.95%
Tax rate	25.10% - 25.50%	25.30%
Cost of debt	4.60% - 5.00%	4.80%
WACC	6.4% - 7.7%	7.0%

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	1.12	1.14

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.80%	11.10%

Tax rate	25.10%	25.50%
Debt/Equity ratio	0.86	0.86
Cost of debt	4.60%	5.00%

After-tax WACC	6.4%	7.7%


Selected WACC	7.0%

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 (9.95%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.12) + 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.