WBR.TO WACC - Weighted Average Cost of Capital

The WACC of Waterloo Brewing Ltd (WBR.TO) is 7.2%.

The Cost of Equity of Waterloo Brewing Ltd (WBR.TO) is 6.05%.

The Cost of Debt of Waterloo Brewing Ltd (WBR.TO) is 13.45%.

	Range	Selected
Cost of equity	5.10% - 7.00%	6.05%
Tax rate	29.20% - 29.70%	29.45%
Cost of debt	6.70% - 20.20%	13.45%
WACC	5.0% - 9.4%	7.2%

WACC

WBR.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.38	0.46

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.10%	7.00%

Tax rate	29.20%	29.70%
Debt/Equity ratio	0.51	0.51
Cost of debt	6.70%	20.20%

After-tax WACC	5.0%	9.4%


Selected WACC	7.2%

WBR.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 WBR.TO:

cost_of_equity (6.05%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.38) + 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.