REVO.V WACC - Weighted Average Cost of Capital

The WACC of RevoluGROUP Canada Inc (REVO.V) is 32.0%.

The Cost of Equity of RevoluGROUP Canada Inc (REVO.V) is 9.30%.

The Cost of Debt of RevoluGROUP Canada Inc (REVO.V) is 74.60%.

	Range	Selected
Cost of equity	7.40% - 11.20%	9.30%
Tax rate	26.20% - 27.00%	26.60%
Cost of debt	74.60% - 74.60%	74.60%
WACC	31.2% - 32.8%	32.0%

WACC

REVO.V WACC calculation

Category	Low	High

Long-term bond rate	3.9%	4.4%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.7	1.04

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.40%	11.20%

Tax rate	26.20%	27.00%
Debt/Equity ratio	1	1
Cost of debt	74.60%	74.60%

After-tax WACC	31.2%	32.8%


Selected WACC	32.0%

REVO.V'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 REVO.V:

cost_of_equity (9.30%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (0.7) + 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.