The WACC of Lassonde Industries Inc (LAS.A.TO) is 5.9%.
Range | Selected | |
Cost of equity | 5.6% - 7.5% | 6.55% |
Tax rate | 25.4% - 26.3% | 25.85% |
Cost of debt | 4.2% - 6.4% | 5.3% |
WACC | 5.0% - 6.8% | 5.9% |
Category | Low | High |
Long-term bond rate | 3.2% | 3.7% |
Equity market risk premium | 5.1% | 6.1% |
Adjusted beta | 0.48 | 0.55 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 5.6% | 7.5% |
Tax rate | 25.4% | 26.3% |
Debt/Equity ratio | 0.33 | 0.33 |
Cost of debt | 4.2% | 6.4% |
After-tax WACC | 5.0% | 6.8% |
Selected WACC | 5.9% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
LAS.A.TO | Lassonde Industries Inc | 0.33 | 0.68 | 0.55 |
BGS | B&G Foods Inc | 5.77 | -0.21 | -0.04 |
HLF.TO | High Liner Foods Inc | 0.6 | 0.46 | 0.32 |
JBSS | John B Sanfilippo & Son Inc | 0.04 | 0.27 | 0.26 |
JJSF | J & J Snack Foods Corp | 0 | 0.19 | 0.19 |
RSI.TO | Rogers Sugar Inc | 0.53 | 0.2 | 0.14 |
SENEA | Seneca Foods Corp | 0.56 | 0.4 | 0.28 |
SMPL | Simply Good Foods Co | 0.12 | 0.62 | 0.57 |
TWNK | Hostess Brands Inc | 0.23 | 0.17 | 0.14 |
UTZ | UTZ Brands Inc | 0.45 | -0.06 | -0.05 |
Low | High | |
Unlevered beta | 0.17 | 0.27 |
Relevered beta | 0.22 | 0.33 |
Adjusted relevered beta | 0.48 | 0.55 |
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 LAS.A.TO:
cost_of_equity (6.55%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.48) + 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.