WFC.TO WACC - Weighted Average Cost of Capital

The WACC of Wall Financial Corp (WFC.TO) is 6.9%.

The Cost of Equity of Wall Financial Corp (WFC.TO) is 10.70%.

The Cost of Debt of Wall Financial Corp (WFC.TO) is 5.50%.

	Range	Selected
Cost of equity	9.00% - 12.40%	10.70%
Tax rate	23.00% - 25.60%	24.30%
Cost of debt	4.20% - 6.80%	5.50%
WACC	5.7% - 8.1%	6.9%

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	1.14	1.34

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.00%	12.40%

Tax rate	23.00%	25.60%
Debt/Equity ratio	1.35	1.35
Cost of debt	4.20%	6.80%

After-tax WACC	5.7%	8.1%


Selected WACC	6.9%

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 (10.70%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.14) + 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.