SES.TO WACC - Weighted Average Cost of Capital
The WACC of Secure Energy Services Inc (SES.TO) is 9.5%.
| Range | Selected | |
| Cost of equity | 8.6% - 11.4% | 10% |
| Tax rate | 22.9% - 24.6% | 23.75% |
| Cost of debt | 7.0% - 8.3% | 7.65% |
| WACC | 8.2% - 10.7% | 9.5% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 1.07 | 1.19 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.6% | 11.4% |
| Tax rate | 22.9% | 24.6% |
| Debt/Equity ratio | 0.15 | 0.15 |
| Cost of debt | 7.0% | 8.3% |
| After-tax WACC | 8.2% | 10.7% |
| Selected WACC | 9.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| SES.TO | Secure Energy Services Inc | 0.15 | 1.26 | 1.13 |
| AROC | Archrock Inc | 0.51 | 1.37 | 0.99 |
| HLX | Helix Energy Solutions Group Inc | 0.32 | 1.24 | 1 |
| LBRT | Liberty Oilfield Services Inc | 0.24 | 1.39 | 1.18 |
| NEX | Nextier Oilfield Solutions Inc | 0.17 | 1.35 | 1.19 |
| PUMP | ProPetro Holding Corp | 0.14 | 1.51 | 1.36 |
| SCL.TO | Shawcor Ltd | 0.21 | 1.12 | 0.96 |
| SLCA | U.S. Silica Holdings Inc | 0.69 | 0.47 | 0.31 |
| USAC | USA Compression Partners LP | 0.88 | 0.74 | 0.45 |
| WTTR | Select Energy Services Inc | 0.09 | 1.51 | 1.41 |
| Low | High | |
| Unlevered beta | 1 | 1.15 |
| Relevered beta | 1.1 | 1.28 |
| Adjusted relevered beta | 1.07 | 1.19 |
SES.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 SES.TO:
cost_of_equity (10.00%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.07) + 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.