Toronto-Dominion Bank (TD.TO) WACC Analysis

As of July 18, 2025, Toronto-Dominion Bank (TD.TO) carries a Weighted Average Cost of Capital (WACC) of 5.3%. WACC reflects the blended rate Toronto-Dominion Bank must pay to both equity and debt holders.

Within that, the cost of equity is 6.2%, the cost of debt is 5.0%, and the effective tax rate is 20.5%.

Breakdown of WACC Components

• Long-term bond rate: 3.2% – 3.7%
• Equity market risk premium: 5.1% – 6.1%
• Adjusted beta: 0.59 – 0.74
• Additional risk adjustment: 0.0% – 0.5%
• Debt-to-equity ratio: 1.48

What It Means for Investors

With a selected WACC of 5.3%, Toronto-Dominion Bank must ensure any new investment returns exceed this threshold to generate shareholder value. This level reflects an attractive low cost of capital.