RPI.UN.TO
Richards Packaging Income Fund
Price:  
32.56 
CAD
Volume:  
5,000.00
Canada | Containers & Packaging
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RPI.UN.TO WACC - Weighted Average Cost of Capital

The WACC of Richards Packaging Income Fund (RPI.UN.TO) is 7.4%.

The Cost of Equity of Richards Packaging Income Fund (RPI.UN.TO) is 7.85%.
The Cost of Debt of Richards Packaging Income Fund (RPI.UN.TO) is 4.25%.

Range Selected
Cost of equity 6.70% - 9.00% 7.85%
Tax rate 28.30% - 29.70% 29.00%
Cost of debt 4.00% - 4.50% 4.25%
WACC 6.3% - 8.4% 7.4%
WACC

RPI.UN.TO WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.7 0.79
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.70% 9.00%
Tax rate 28.30% 29.70%
Debt/Equity ratio 0.11 0.11
Cost of debt 4.00% 4.50%
After-tax WACC 6.3% 8.4%
Selected WACC 7.4%

RPI.UN.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 RPI.UN.TO:

cost_of_equity (7.85%) = risk_free_rate (3.45%) + 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.