PMZ.UN.TO WACC - Weighted Average Cost of Capital

The WACC of Primaris Real Estate Investment Trust (PMZ.UN.TO) is 6.3%.

The Cost of Equity of Primaris Real Estate Investment Trust (PMZ.UN.TO) is 9.15%.

The Cost of Debt of Primaris Real Estate Investment Trust (PMZ.UN.TO) is 5.65%.

	Range	Selected
Cost of equity	8.00% - 10.30%	9.15%
Tax rate	25.90% - 26.50%	26.20%
Cost of debt	4.50% - 6.80%	5.65%
WACC	5.3% - 7.2%	6.3%

WACC

PMZ.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	0.94	1

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.00%	10.30%

Tax rate	25.90%	26.50%
Debt/Equity ratio	1.35	1.35
Cost of debt	4.50%	6.80%

After-tax WACC	5.3%	7.2%


Selected WACC	6.3%

PMZ.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 PMZ.UN.TO:

cost_of_equity (9.15%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.94) + 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.