PGI.UN.TO
PIMCO Global Income Opportunities Fund
Price:  
7.14 
CAD
Volume:  
8,500.00
Canada | N/A
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PGI.UN.TO WACC - Weighted Average Cost of Capital

The WACC of PIMCO Global Income Opportunities Fund (PGI.UN.TO) is 6.7%.

The Cost of Equity of PIMCO Global Income Opportunities Fund (PGI.UN.TO) is 8.15%.
The Cost of Debt of PIMCO Global Income Opportunities Fund (PGI.UN.TO) is 4.65%.

Range Selected
Cost of equity 7.20% - 9.10% 8.15%
Tax rate 25.90% - 26.50% 26.20%
Cost of debt 4.40% - 4.90% 4.65%
WACC 6.0% - 7.4% 6.7%
WACC

PGI.UN.TO WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.8 0.8
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.20% 9.10%
Tax rate 25.90% 26.50%
Debt/Equity ratio 0.45 0.45
Cost of debt 4.40% 4.90%
After-tax WACC 6.0% 7.4%
Selected WACC 6.7%

PGI.UN.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 PGI.UN.TO:

cost_of_equity (8.15%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.8) + 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.