RSI.TO WACC - Weighted Average Cost of Capital
The WACC of Rogers Sugar Inc (RSI.TO) is 6.0%.
| Range | Selected | |
| Cost of equity | 6.4% - 8.7% | 7.55% |
| Tax rate | 26.9% - 27.5% | 27.2% |
| Cost of debt | 4.2% - 4.5% | 4.35% |
| WACC | 5.2% - 6.8% | 6.0% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.63 | 0.75 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.4% | 8.7% |
| Tax rate | 26.9% | 27.5% |
| Debt/Equity ratio | 0.53 | 0.53 |
| Cost of debt | 4.2% | 4.5% |
| After-tax WACC | 5.2% | 6.8% |
| Selected WACC | 6.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| RSI.TO | Rogers Sugar Inc | 0.53 | 0.22 | 0.16 |
| FARM | Farmer Bros Co | 0.74 | 0.49 | 0.32 |
| HLF.TO | High Liner Foods Inc | 0.59 | 0.48 | 0.33 |
| JBSS | John B Sanfilippo & Son Inc | 0.04 | 0.3 | 0.29 |
| LAS.A.TO | Lassonde Industries Inc | 0.33 | 0.64 | 0.52 |
| LNDC | Landec Corp | 0.39 | 1.07 | 0.84 |
| MMMB | MamaMancini's Holdings Inc | 0.07 | 0.42 | 0.4 |
| PLIN | China Xiangtai Food Co Ltd | 0.02 | 1.1 | 1.08 |
| SMPL | Simply Good Foods Co | 0.12 | 0.59 | 0.54 |
| TR | Tootsie Roll Industries Inc | 0 | 0.13 | 0.13 |
| Low | High | |
| Unlevered beta | 0.33 | 0.45 |
| Relevered beta | 0.45 | 0.63 |
| Adjusted relevered beta | 0.63 | 0.75 |
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 (7.55%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.63) + 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.