T.TO WACC - Weighted Average Cost of Capital

The WACC of Telus Corp (T.TO) is 4.8%.

The Cost of Equity of Telus Corp (T.TO) is 5.50%.

The Cost of Debt of Telus Corp (T.TO) is 5.55%.

	Range	Selected
Cost of equity	4.80% - 6.20%	5.50%
Tax rate	24.70% - 25.70%	25.20%
Cost of debt	4.30% - 6.80%	5.55%
WACC	4.0% - 5.6%	4.8%

WACC

T.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.32	0.34

Additional risk adjustments	0.0%	0.5%
Cost of equity	4.80%	6.20%

Tax rate	24.70%	25.70%
Debt/Equity ratio	0.95	0.95
Cost of debt	4.30%	6.80%

After-tax WACC	4.0%	5.6%


Selected WACC	4.8%

T.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 T.TO:

cost_of_equity (5.50%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.32) + 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.