TCL.A.TO
Transcontinental Inc
Price:  
20.38 
CAD
Volume:  
71,225.00
Canada | Commercial Services & Supplies
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TCL.A.TO WACC - Weighted Average Cost of Capital

The WACC of Transcontinental Inc (TCL.A.TO) is 6.2%.

The Cost of Equity of Transcontinental Inc (TCL.A.TO) is 7.35%.
The Cost of Debt of Transcontinental Inc (TCL.A.TO) is 5.50%.

Range Selected
Cost of equity 6.00% - 8.70% 7.35%
Tax rate 19.70% - 25.10% 22.40%
Cost of debt 4.00% - 7.00% 5.50%
WACC 5.0% - 7.4% 6.2%
WACC

TCL.A.TO WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.56 0.74
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.00% 8.70%
Tax rate 19.70% 25.10%
Debt/Equity ratio 0.58 0.58
Cost of debt 4.00% 7.00%
After-tax WACC 5.0% 7.4%
Selected WACC 6.2%

TCL.A.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 TCL.A.TO:

cost_of_equity (7.35%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.56) + 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.