SAP.TO
Saputo Inc
Price:  
27.55 
CAD
Volume:  
259,084
Canada | Food Products

SAP.TO WACC - Weighted Average Cost of Capital

The WACC of Saputo Inc (SAP.TO) is 5.1%.

The Cost of Equity of Saputo Inc (SAP.TO) is 5.75%.
The Cost of Debt of Saputo Inc (SAP.TO) is 4.3%.

RangeSelected
Cost of equity5.0% - 6.5%5.75%
Tax rate29.8% - 33.2%31.5%
Cost of debt4.0% - 4.6%4.3%
WACC4.4% - 5.7%5.1%
WACC

SAP.TO WACC calculation

CategoryLowHigh
Long-term bond rate3.2%3.7%
Equity market risk premium5.1%6.1%
Adjusted beta0.350.38
Additional risk adjustments0.0%0.5%
Cost of equity5.0%6.5%
Tax rate29.8%33.2%
Debt/Equity ratio
0.310.31
Cost of debt4.0%4.6%
After-tax WACC4.4%5.7%
Selected WACC5.1%

SAP.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 SAP.TO:

cost_of_equity (5.75%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.35) + 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.