RECP.TO WACC - Weighted Average Cost of Capital

The WACC of Recipe Unlimited Corp (RECP.TO) is 6.5%.

The Cost of Equity of Recipe Unlimited Corp (RECP.TO) is 9.25%.

The Cost of Debt of Recipe Unlimited Corp (RECP.TO) is 4.25%.

	Range	Selected
Cost of equity	7.40% - 11.10%	9.25%
Tax rate	23.40% - 25.20%	24.30%
Cost of debt	4.00% - 4.50%	4.25%
WACC	5.5% - 7.6%	6.5%

WACC

RECP.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.83	1.14

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.40%	11.10%

Tax rate	23.40%	25.20%
Debt/Equity ratio	0.82	0.82
Cost of debt	4.00%	4.50%

After-tax WACC	5.5%	7.6%


Selected WACC	6.5%

RECP.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 RECP.TO:

cost_of_equity (9.25%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.83) + 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.