RIV.TO
RIV Capital Inc
Price:  
1.37 
CAD
Volume:  
444,640.00
Canada | Capital Markets
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RIV.TO WACC - Weighted Average Cost of Capital

The WACC of RIV Capital Inc (RIV.TO) is 8.8%.

The Cost of Equity of RIV Capital Inc (RIV.TO) is 8.75%.
The Cost of Debt of RIV Capital Inc (RIV.TO) is 5.00%.

Range Selected
Cost of equity 7.70% - 9.80% 8.75%
Tax rate 12.70% - 14.50% 13.60%
Cost of debt 5.00% - 5.00% 5.00%
WACC 7.7% - 9.8% 8.8%
WACC

RIV.TO WACC calculation

Category Low High
Long-term bond rate 3.4% 3.9%
Equity market risk premium 4.7% 5.7%
Adjusted beta 0.92 0.96
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.70% 9.80%
Tax rate 12.70% 14.50%
Debt/Equity ratio 0 0
Cost of debt 5.00% 5.00%
After-tax WACC 7.7% 9.8%
Selected WACC 8.8%

RIV.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 RIV.TO:

cost_of_equity (8.75%) = risk_free_rate (3.65%) + equity_risk_premium (5.20%) * adjusted_beta (0.92) + 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.