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 9.80%.

The Cost of Debt of RF Capital Group Inc (RCG.TO) is 6.50%.

	Range	Selected
Cost of equity	8.10% - 11.50%	9.80%
Tax rate	25.90% - 26.50%	26.20%
Cost of debt	6.20% - 6.80%	6.50%
WACC	6.1% - 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	1.2

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.10%	11.50%

Tax rate	25.90%	26.50%
Debt/Equity ratio	1.32	1.32
Cost of debt	6.20%	6.80%

After-tax WACC	6.1%	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 (9.80%) = 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.