PFB.TO WACC - Weighted Average Cost of Capital
The WACC of PFB Corporation (PFB.TO) is 8.7%.
| Range | Selected | |
| Cost of equity | 6.9% - 11.5% | 9.2% |
| Tax rate | 26.6% - 27.2% | 26.9% |
| Cost of debt | 4.0% - 7.2% | 5.6% |
| WACC | 6.5% - 11.0% | 8.7% |
| Category | Low | High |
| Long-term bond rate | 3.4% | 3.9% |
| Equity market risk premium | 4.7% | 5.7% |
| Adjusted beta | 0.75 | 1.25 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.9% | 11.5% |
| Tax rate | 26.6% | 27.2% |
| Debt/Equity ratio | 0.1 | 0.1 |
| Cost of debt | 4.0% | 7.2% |
| After-tax WACC | 6.5% | 11.0% |
| Selected WACC | 8.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| PFB.TO | PFB Corporation | 0.1 | 0.52 | 0.49 |
| AEHL | Antelope Enterprise Holdings Ltd | 0.03 | -0.68 | -0.66 |
| AMWD | American Woodmark Corp | 0.43 | 1.07 | 0.82 |
| BURCA | Burnham Holdings Inc | 0.29 | 0.17 | 0.14 |
| CSTE | Caesarstone Ltd | 0.07 | 0.73 | 0.7 |
| DOOR | Masonite International Corp | 0.38 | 1.54 | 1.21 |
| IVX.V | Inventronics Ltd | 1.11 | 0.66 | 0.36 |
| NX | Quanex Building Products Corp | 0.94 | 0.58 | 0.34 |
| TKLS | Trutankless Inc | 0.4 | 13.85 | 10.73 |
| WMS | Advanced Drainage Systems Inc | 0.15 | 1.04 | 0.94 |
| Low | High | |
| Unlevered beta | 0.44 | 0.75 |
| Relevered beta | 0.63 | 1.37 |
| Adjusted relevered beta | 0.75 | 1.25 |
PFB.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 PFB.TO:
cost_of_equity (9.20%) = risk_free_rate (3.65%) + equity_risk_premium (5.20%) * adjusted_beta (0.75) + 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.