PF.BK WACC - Weighted Average Cost of Capital

The WACC of Property Perfect PCL (PF.BK) is 6.6%.

The Cost of Equity of Property Perfect PCL (PF.BK) is 29.55%.

The Cost of Debt of Property Perfect PCL (PF.BK) is 6.45%.

	Range	Selected
Cost of equity	21.80% - 37.30%	29.55%
Tax rate	8.90% - 13.30%	11.10%
Cost of debt	5.90% - 7.00%	6.45%
WACC	6.0% - 7.2%	6.6%

WACC

PF.BK WACC calculation

Category	Low	High

Long-term bond rate	2.6%	3.1%
Equity market risk premium	7.4%	8.4%
Adjusted beta	2.59	4

Additional risk adjustments	0.0%	0.5%
Cost of equity	21.80%	37.30%

Tax rate	8.90%	13.30%
Debt/Equity ratio	27.47	27.47
Cost of debt	5.90%	7.00%

After-tax WACC	6.0%	7.2%


Selected WACC	6.6%

PF.BK'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 PF.BK:

cost_of_equity (29.55%) = risk_free_rate (2.85%) + equity_risk_premium (7.90%) * adjusted_beta (2.59) + 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.