RCI.B.TO WACC - Weighted Average Cost of Capital

The WACC of Rogers Communications Inc (RCI.B.TO) is 5.4%.

The Cost of Equity of Rogers Communications Inc (RCI.B.TO) is 7.35%.

The Cost of Debt of Rogers Communications Inc (RCI.B.TO) is 5.65%.

	Range	Selected
Cost of equity	6.10% - 8.60%	7.35%
Tax rate	26.70% - 26.70%	26.70%
Cost of debt	4.50% - 6.80%	5.65%
WACC	4.4% - 6.4%	5.4%

WACC

RCI.B.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.58	0.73

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.10%	8.60%

Tax rate	26.70%	26.70%
Debt/Equity ratio	1.6	1.6
Cost of debt	4.50%	6.80%

After-tax WACC	4.4%	6.4%


Selected WACC	5.4%

RCI.B.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 RCI.B.TO:

cost_of_equity (7.35%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.58) + 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.