UNC.TO WACC - Weighted Average Cost of Capital
The WACC of United Corporations Ltd (UNC.TO) is 8.3%.
| Range | Selected | |
| Cost of equity | 10.9% - 13.5% | 12.2% |
| Tax rate | 11.7% - 13.6% | 12.65% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 7.7% - 8.9% | 8.3% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 1.52 | 1.54 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.9% | 13.5% |
| Tax rate | 11.7% | 13.6% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 7.7% | 8.9% |
| Selected WACC | 8.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| UNC.TO | United Corporations Ltd | 1.13 | 0.62 | 0.31 |
| APSG | Apollo Strategic Growth Capital | 0.01 | 0.96 | 0.96 |
| CCX | Churchill Capital Corp II | 0 | 0.94 | 0.93 |
| THCBU | Tuscan Holdings Corp | 0 | 0.98 | 0.98 |
| Low | High | |
| Unlevered beta | 0.94 | 0.95 |
| Relevered beta | 1.78 | 1.81 |
| Adjusted relevered beta | 1.52 | 1.54 |
UNC.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 UNC.TO:
cost_of_equity (12.20%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.52) + 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.