RSI.TO WACC - Weighted Average Cost of Capital

The WACC of Rogers Sugar Inc (RSI.TO) is 6.0%.

The Cost of Equity of Rogers Sugar Inc (RSI.TO) is 7.50%.

The Cost of Debt of Rogers Sugar Inc (RSI.TO) is 4.35%.

	Range	Selected
Cost of equity	6.30% - 8.70%	7.50%
Tax rate	26.90% - 27.50%	27.20%
Cost of debt	4.20% - 4.50%	4.35%
WACC	5.2% - 6.8%	6.0%

WACC

RSI.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.62	0.74

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.30%	8.70%

Tax rate	26.90%	27.50%
Debt/Equity ratio	0.53	0.53
Cost of debt	4.20%	4.50%

After-tax WACC	5.2%	6.8%


Selected WACC	6.0%

RSI.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 RSI.TO:

cost_of_equity (7.50%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.62) + 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.