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

The WACC of NorthWest Healthcare Properties REIT (NWH.UN.TO) is 8.4%.

The Cost of Equity of NorthWest Healthcare Properties REIT (NWH.UN.TO) is 8.05%.

The Cost of Debt of NorthWest Healthcare Properties REIT (NWH.UN.TO) is 9.80%.

	Range	Selected
Cost of equity	6.70% - 9.40%	8.05%
Tax rate	9.50% - 14.80%	12.15%
Cost of debt	4.70% - 14.90%	9.80%
WACC	5.0% - 11.8%	8.4%

WACC

NWH.UN.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.69	0.86

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.70%	9.40%

Tax rate	9.50%	14.80%
Debt/Equity ratio	2.47	2.47
Cost of debt	4.70%	14.90%

After-tax WACC	5.0%	11.8%


Selected WACC	8.4%

NWH.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 NWH.UN.TO:

cost_of_equity (8.05%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.69) + 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.