OLY.TO
Olympia Financial Group Inc
Price:  
120.52 
CAD
Volume:  
770
Canada | Capital Markets

OLY.TO WACC - Weighted Average Cost of Capital

The WACC of Olympia Financial Group Inc (OLY.TO) is 6.1%.

The Cost of Equity of Olympia Financial Group Inc (OLY.TO) is 6.1%.
The Cost of Debt of Olympia Financial Group Inc (OLY.TO) is 4.25%.

RangeSelected
Cost of equity5.2% - 7.0%6.1%
Tax rate23.7% - 24.0%23.85%
Cost of debt4.0% - 4.5%4.25%
WACC5.2% - 6.9%6.1%
WACC

OLY.TO WACC calculation

CategoryLowHigh
Long-term bond rate3.2%3.7%
Equity market risk premium5.1%6.1%
Adjusted beta0.40.46
Additional risk adjustments0.0%0.5%
Cost of equity5.2%7.0%
Tax rate23.7%24.0%
Debt/Equity ratio
0.010.01
Cost of debt4.0%4.5%
After-tax WACC5.2%6.9%
Selected WACC6.1%

OLY.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 OLY.TO:

cost_of_equity (6.10%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.4) + 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.