TCL.A.TO WACC - Weighted Average Cost of Capital

The WACC of Transcontinental Inc (TCL.A.TO) is 6.1%.

The Cost of Equity of Transcontinental Inc (TCL.A.TO) is 7.20%.

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

	Range	Selected
Cost of equity	5.80% - 8.60%	7.20%
Tax rate	19.70% - 25.10%	22.40%
Cost of debt	4.00% - 7.00%	5.50%
WACC	4.9% - 7.4%	6.1%

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	0.53	0.73

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.80%	8.60%

Tax rate	19.70%	25.10%
Debt/Equity ratio	0.56	0.56
Cost of debt	4.00%	7.00%

After-tax WACC	4.9%	7.4%


Selected WACC	6.1%

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 (7.20%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.53) + 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.