SDE.TO
Spartan Delta Corp
Price:  
4.39 
CAD
Volume:  
426,377.00
Canada | Oil, Gas & Consumable Fuels
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SDE.TO WACC - Weighted Average Cost of Capital

The WACC of Spartan Delta Corp (SDE.TO) is 10.0%.

The Cost of Equity of Spartan Delta Corp (SDE.TO) is 10.55%.
The Cost of Debt of Spartan Delta Corp (SDE.TO) is 7.40%.

Range Selected
Cost of equity 9.10% - 12.00% 10.55%
Tax rate 9.50% - 13.50% 11.50%
Cost of debt 6.30% - 8.50% 7.40%
WACC 8.6% - 11.4% 10.0%
WACC

SDE.TO WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta 1.16 1.29
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.10% 12.00%
Tax rate 9.50% 13.50%
Debt/Equity ratio 0.17 0.17
Cost of debt 6.30% 8.50%
After-tax WACC 8.6% 11.4%
Selected WACC 10.0%

SDE.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 SDE.TO:

cost_of_equity (10.55%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.16) + 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.