WFC.TO WACC - Weighted Average Cost of Capital

The WACC of Wall Financial Corp (WFC.TO) is 5.7%.

The Cost of Equity of Wall Financial Corp (WFC.TO) is 7.35%.

The Cost of Debt of Wall Financial Corp (WFC.TO) is 6.20%.

	Range	Selected
Cost of equity	5.60% - 9.10%	7.35%
Tax rate	23.00% - 25.40%	24.20%
Cost of debt	4.00% - 8.40%	6.20%
WACC	4.0% - 7.4%	5.7%

WACC

WFC.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.47	0.82

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.60%	9.10%

Tax rate	23.00%	25.40%
Debt/Equity ratio	1.59	1.59
Cost of debt	4.00%	8.40%

After-tax WACC	4.0%	7.4%


Selected WACC	5.7%

WFC.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 WFC.TO:

cost_of_equity (7.35%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.47) + 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.