PNC.A.TO
Postmedia Network Canada Corp
Price:  
1.34 
CAD
Volume:  
200.00
Canada | Media
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PNC.A.TO WACC - Weighted Average Cost of Capital

The WACC of Postmedia Network Canada Corp (PNC.A.TO) is 5.8%.

The Cost of Equity of Postmedia Network Canada Corp (PNC.A.TO) is 13.05%.
The Cost of Debt of Postmedia Network Canada Corp (PNC.A.TO) is 4.25%.

Range Selected
Cost of equity 10.20% - 15.90% 13.05%
Tax rate 25.90% - 26.50% 26.20%
Cost of debt 4.00% - 4.50% 4.25%
WACC 4.9% - 6.7% 5.8%
WACC

PNC.A.TO WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta 1.37 1.93
Additional risk adjustments 0.0% 0.5%
Cost of equity 10.20% 15.90%
Tax rate 25.90% 26.50%
Debt/Equity ratio 2.68 2.68
Cost of debt 4.00% 4.50%
After-tax WACC 4.9% 6.7%
Selected WACC 5.8%

PNC.A.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 PNC.A.TO:

cost_of_equity (13.05%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.37) + 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.