PLC.TO WACC - Weighted Average Cost of Capital

The WACC of Park Lawn Corp (PLC.TO) is 6.9%.

The Cost of Equity of Park Lawn Corp (PLC.TO) is 6.85%.

The Cost of Debt of Park Lawn Corp (PLC.TO) is 9.75%.

	Range	Selected
Cost of equity	5.90% - 7.80%	6.85%
Tax rate	28.10% - 28.80%	28.45%
Cost of debt	4.60% - 14.90%	9.75%
WACC	5.4% - 8.4%	6.9%

WACC

PLC.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.55	0.59

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.90%	7.80%

Tax rate	28.10%	28.80%
Debt/Equity ratio	0.26	0.26
Cost of debt	4.60%	14.90%

After-tax WACC	5.4%	8.4%


Selected WACC	6.9%

PLC.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 PLC.TO:

cost_of_equity (6.85%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.55) + 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.