NHF.UN.TO WACC - Weighted Average Cost of Capital

The WACC of Northview Fund (NHF.UN.TO) is 4.5%.

The Cost of Equity of Northview Fund (NHF.UN.TO) is 9.75%.

The Cost of Debt of Northview Fund (NHF.UN.TO) is 5.85%.

	Range	Selected
Cost of equity	8.80% - 10.70%	9.75%
Tax rate	25.90% - 26.50%	26.20%
Cost of debt	4.70% - 7.00%	5.85%
WACC	3.7% - 5.3%	4.5%

WACC

NHF.UN.TO WACC calculation

Category	Low	High

Long-term bond rate	3.6%	4.1%
Equity market risk premium	5.5%	6.5%
Adjusted beta	0.95	0.95

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.80%	10.70%

Tax rate	25.90%	26.50%
Debt/Equity ratio	29.81	29.81
Cost of debt	4.70%	7.00%

After-tax WACC	3.7%	5.3%


Selected WACC	4.5%

NHF.UN.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 NHF.UN.TO:

cost_of_equity (9.75%) = risk_free_rate (3.85%) + equity_risk_premium (6.00%) * adjusted_beta (0.95) + 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.