NFI.TO WACC - Weighted Average Cost of Capital

The WACC of NFI Group Inc (NFI.TO) is 7.4%.

The Cost of Equity of NFI Group Inc (NFI.TO) is 9.20%.

The Cost of Debt of NFI Group Inc (NFI.TO) is 7.30%.

	Range	Selected
Cost of equity	7.60% - 10.80%	9.20%
Tax rate	17.50% - 27.90%	22.70%
Cost of debt	7.00% - 7.60%	7.30%
WACC	6.7% - 8.1%	7.4%

WACC

NFI.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.87	1.1

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.60%	10.80%

Tax rate	17.50%	27.90%
Debt/Equity ratio	1.04	1.04
Cost of debt	7.00%	7.60%

After-tax WACC	6.7%	8.1%


Selected WACC	7.4%

NFI.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 NFI.TO:

cost_of_equity (9.20%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.87) + 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.