SDE.TO WACC - Weighted Average Cost of Capital

The WACC of Spartan Delta Corp (SDE.TO) is 3.2%.

The Cost of Equity of Spartan Delta Corp (SDE.TO) is 3.05%.

The Cost of Debt of Spartan Delta Corp (SDE.TO) is 7.05%.

	Range	Selected
Cost of equity	2.50% - 3.60%	3.05%
Tax rate	9.50% - 15.80%	12.65%
Cost of debt	4.10% - 10.00%	7.05%
WACC	2.6% - 3.9%	3.2%

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	-0.13	-0.09

Additional risk adjustments	0.0%	0.5%
Cost of equity	2.50%	3.60%

Tax rate	9.50%	15.80%
Debt/Equity ratio	0.06	0.06
Cost of debt	4.10%	10.00%

After-tax WACC	2.6%	3.9%


Selected WACC	3.2%

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 (3.05%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (-0.13) + 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.