TPX.A.TO
Molson Coors Canada Inc
Price:  
79.00 
CAD
Volume:  
250.00
Canada | Beverages
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TPX.A.TO WACC - Weighted Average Cost of Capital

The WACC of Molson Coors Canada Inc (TPX.A.TO) is 5.7%.

The Cost of Equity of Molson Coors Canada Inc (TPX.A.TO) is 5.85%.
The Cost of Debt of Molson Coors Canada Inc (TPX.A.TO) is 5.20%.

Range Selected
Cost of equity 5.00% - 6.70% 5.85%
Tax rate 28.80% - 30.40% 29.60%
Cost of debt 4.40% - 6.00% 5.20%
WACC 4.9% - 6.6% 5.7%
WACC

TPX.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 0.36 0.42
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.00% 6.70%
Tax rate 28.80% 30.40%
Debt/Equity ratio 0.06 0.06
Cost of debt 4.40% 6.00%
After-tax WACC 4.9% 6.6%
Selected WACC 5.7%

TPX.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 TPX.A.TO:

cost_of_equity (5.85%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.36) + 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.