MX.TO WACC - Weighted Average Cost of Capital

The WACC of Methanex Corp (MX.TO) is 7.5%.

The Cost of Equity of Methanex Corp (MX.TO) is 11.15%.

The Cost of Debt of Methanex Corp (MX.TO) is 5.90%.

	Range	Selected
Cost of equity	8.50% - 13.80%	11.15%
Tax rate	14.20% - 18.20%	16.20%
Cost of debt	5.50% - 6.30%	5.90%
WACC	6.3% - 8.7%	7.5%

WACC

MX.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	1.06	1.58

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.50%	13.80%

Tax rate	14.20%	18.20%
Debt/Equity ratio	1.42	1.42
Cost of debt	5.50%	6.30%

After-tax WACC	6.3%	8.7%


Selected WACC	7.5%

MX.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 MX.TO:

cost_of_equity (11.15%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.06) + 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.