TSAT
Telesat Corp
Price:  
23.49 
USD
Volume:  
150,770.00
Canada | Media
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TSAT WACC - Weighted Average Cost of Capital

The WACC of Telesat Corp (TSAT) is 8.3%.

The Cost of Equity of Telesat Corp (TSAT) is 8.15%.
The Cost of Debt of Telesat Corp (TSAT) is 10.25%.

Range Selected
Cost of equity 6.80% - 9.50% 8.15%
Tax rate 9.60% - 21.30% 15.45%
Cost of debt 4.90% - 15.60% 10.25%
WACC 4.7% - 12.0% 8.3%
WACC

TSAT WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.64 0.83
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.80% 9.50%
Tax rate 9.60% 21.30%
Debt/Equity ratio 8.11 8.11
Cost of debt 4.90% 15.60%
After-tax WACC 4.7% 12.0%
Selected WACC 8.3%

TSAT'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 TSAT:

cost_of_equity (8.15%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.64) + 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.