OGD.TO
Forage Orbit Garant Inc
Price:  
1.41 
CAD
Volume:  
36,210
Canada | Metals & Mining

OGD.TO WACC - Weighted Average Cost of Capital

The WACC of Forage Orbit Garant Inc (OGD.TO) is 6.5%.

The Cost of Equity of Forage Orbit Garant Inc (OGD.TO) is 7.9%.
The Cost of Debt of Forage Orbit Garant Inc (OGD.TO) is 5.9%.

RangeSelected
Cost of equity6.1% - 9.7%7.9%
Tax rate25.9% - 26.5%26.2%
Cost of debt4.6% - 7.2%5.9%
WACC5.1% - 8.0%6.5%
WACC

OGD.TO WACC calculation

CategoryLowHigh
Long-term bond rate3.2%3.7%
Equity market risk premium5.1%6.1%
Adjusted beta0.580.91
Additional risk adjustments0.0%0.5%
Cost of equity6.1%9.7%
Tax rate25.9%26.5%
Debt/Equity ratio
0.650.65
Cost of debt4.6%7.2%
After-tax WACC5.1%8.0%
Selected WACC6.5%

OGD.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 OGD.TO:

cost_of_equity (7.90%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.58) + 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.