MX.TO
Methanex Corp
Price:  
43.07 
CAD
Volume:  
27,509.00
Canada | Chemicals
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MX.TO WACC - Weighted Average Cost of Capital

The WACC of Methanex Corp (MX.TO) is 7.4%.

The Cost of Equity of Methanex Corp (MX.TO) is 9.95%.
The Cost of Debt of Methanex Corp (MX.TO) is 6.95%.

Range Selected
Cost of equity 6.80% - 13.10% 9.95%
Tax rate 14.20% - 18.20% 16.20%
Cost of debt 5.50% - 8.40% 6.95%
WACC 5.6% - 9.3% 7.4%
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 0.72 1.46
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.80% 13.10%
Tax rate 14.20% 18.20%
Debt/Equity ratio 1.54 1.54
Cost of debt 5.50% 8.40%
After-tax WACC 5.6% 9.3%
Selected WACC 7.4%

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 (9.95%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.72) + 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.