URB.TO
Urbana Corp
Price:  
6.57 
CAD
Volume:  
145
Canada | Capital Markets

URB.TO WACC - Weighted Average Cost of Capital

The WACC of Urbana Corp (URB.TO) is 6.7%.

The Cost of Equity of Urbana Corp (URB.TO) is 8.9%.
The Cost of Debt of Urbana Corp (URB.TO) is 4.95%.

RangeSelected
Cost of equity7.4% - 10.4%8.9%
Tax rate10.6% - 11.3%10.95%
Cost of debt4.0% - 5.9%4.95%
WACC5.5% - 7.8%6.7%
WACC

URB.TO WACC calculation

CategoryLowHigh
Long-term bond rate3.2%3.7%
Equity market risk premium5.1%6.1%
Adjusted beta0.831.03
Additional risk adjustments0.0%0.5%
Cost of equity7.4%10.4%
Tax rate10.6%11.3%
Debt/Equity ratio
11
Cost of debt4.0%5.9%
After-tax WACC5.5%7.8%
Selected WACC6.7%

URB.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 URB.TO:

cost_of_equity (8.90%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.83) + 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.