PTO.UN.TO
PIMCO Tactical Income Opportunities Fund
Price:  
7.58 
CAD
Volume:  
22,730.00
Canada | N/A
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PTO.UN.TO WACC - Weighted Average Cost of Capital

The WACC of PIMCO Tactical Income Opportunities Fund (PTO.UN.TO) is 8.8%.

The Cost of Equity of PIMCO Tactical Income Opportunities Fund (PTO.UN.TO) is 9.70%.
The Cost of Debt of PIMCO Tactical Income Opportunities Fund (PTO.UN.TO) is 4.60%.

Range Selected
Cost of equity 8.70% - 10.70% 9.70%
Tax rate 25.90% - 26.50% 26.20%
Cost of debt 4.60% - 4.60% 4.60%
WACC 7.9% - 9.7% 8.8%
WACC

PTO.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 1.08 1.08
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.70% 10.70%
Tax rate 25.90% 26.50%
Debt/Equity ratio 0.17 0.17
Cost of debt 4.60% 4.60%
After-tax WACC 7.9% 9.7%
Selected WACC 8.8%

PTO.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 PTO.UN.TO:

cost_of_equity (9.70%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.08) + 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.