RCG.TO
RF Capital Group Inc
Price:  
7.73 
CAD
Volume:  
2,000.00
Canada | Capital Markets
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RCG.TO WACC - Weighted Average Cost of Capital

The WACC of RF Capital Group Inc (RCG.TO) is 7.0%.

The Cost of Equity of RF Capital Group Inc (RCG.TO) is 9.95%.
The Cost of Debt of RF Capital Group Inc (RCG.TO) is 6.25%.

Range Selected
Cost of equity 8.10% - 11.80% 9.95%
Tax rate 25.90% - 26.50% 26.20%
Cost of debt 6.20% - 6.30% 6.25%
WACC 6.2% - 7.8% 7.0%
WACC

RCG.TO WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.97 1.26
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.10% 11.80%
Tax rate 25.90% 26.50%
Debt/Equity ratio 1.25 1.25
Cost of debt 6.20% 6.30%
After-tax WACC 6.2% 7.8%
Selected WACC 7.0%

RCG.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 RCG.TO:

cost_of_equity (9.95%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.97) + 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.