OLY.TO WACC - Weighted Average Cost of Capital
The WACC of Olympia Financial Group Inc (OLY.TO) is 6.1%.
| Range | Selected | |
| Cost of equity | 5.2% - 7.0% | 6.1% |
| Tax rate | 23.7% - 24.0% | 23.85% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 5.2% - 6.9% | 6.1% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.4 | 0.46 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.2% | 7.0% |
| Tax rate | 23.7% | 24.0% |
| Debt/Equity ratio | 0.01 | 0.01 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 5.2% | 6.9% |
| Selected WACC | 6.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| OLY.TO | Olympia Financial Group Inc | 0.01 | 0.26 | 0.26 |
| CPTA | Capitala Finance Corp | 3.1 | 1.93 | 0.57 |
| CRWN.TO | Crown Capital Partners Inc | 14.39 | -0.26 | -0.02 |
| GECC | Great Elm Capital Corp | 1.5 | 0.36 | 0.17 |
| HGBL | Heritage Global Inc | 0 | 0.14 | 0.14 |
| HNNA | Hennessy Advisors Inc | 0.41 | 0.06 | 0.04 |
| ICMB | Investcorp Credit Management BDC Inc | 3.08 | 0.8 | 0.24 |
| MDLY | Medley Management Inc | 3.9 | 1.78 | 0.45 |
| OFS | OFS Capital Corp | 2.18 | 0.15 | 0.06 |
| PFX | Phenixfin Corporation | 1.34 | 0.11 | 0.05 |
| Low | High | |
| Unlevered beta | 0.11 | 0.2 |
| Relevered beta | 0.1 | 0.19 |
| Adjusted relevered beta | 0.4 | 0.46 |
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.