PIF.TO
Polaris Infrastructure Inc
Price:  
11.58 
CAD
Volume:  
11,436.00
Canada | Independent Power and Renewable Electricity Producers
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PIF.TO WACC - Weighted Average Cost of Capital

The WACC of Polaris Infrastructure Inc (PIF.TO) is 6.9%.

The Cost of Equity of Polaris Infrastructure Inc (PIF.TO) is 6.25%.
The Cost of Debt of Polaris Infrastructure Inc (PIF.TO) is 9.75%.

Range Selected
Cost of equity 5.30% - 7.20% 6.25%
Tax rate 25.90% - 26.50% 26.20%
Cost of debt 7.80% - 11.70% 9.75%
WACC 5.6% - 8.1% 6.9%
WACC

PIF.TO WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.42 0.5
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.30% 7.20%
Tax rate 25.90% 26.50%
Debt/Equity ratio 1.88 1.88
Cost of debt 7.80% 11.70%
After-tax WACC 5.6% 8.1%
Selected WACC 6.9%

PIF.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 PIF.TO:

cost_of_equity (6.25%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.42) + 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.