PBL.TO WACC - Weighted Average Cost of Capital

The WACC of Pollard Banknote Ltd (PBL.TO) is 7.3%.

The Cost of Equity of Pollard Banknote Ltd (PBL.TO) is 7.95%.

The Cost of Debt of Pollard Banknote Ltd (PBL.TO) is 6.85%.

	Range	Selected
Cost of equity	6.50% - 9.40%	7.95%
Tax rate	22.90% - 27.60%	25.25%
Cost of debt	5.30% - 8.40%	6.85%
WACC	6.0% - 8.7%	7.3%

WACC

PBL.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.66	0.87

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.50%	9.40%

Tax rate	22.90%	27.60%
Debt/Equity ratio	0.3	0.3
Cost of debt	5.30%	8.40%

After-tax WACC	6.0%	8.7%


Selected WACC	7.3%

PBL.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 PBL.TO:

cost_of_equity (7.95%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.66) + 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.