SGR.UN.TO WACC - Weighted Average Cost of Capital

The WACC of Slate Grocery REIT (SGR.UN.TO) is 6.7%.

The Cost of Equity of Slate Grocery REIT (SGR.UN.TO) is 11.00%.

The Cost of Debt of Slate Grocery REIT (SGR.UN.TO) is 5.75%.

	Range	Selected
Cost of equity	9.20% - 12.80%	11.00%
Tax rate	17.20% - 21.90%	19.55%
Cost of debt	4.70% - 6.80%	5.75%
WACC	5.7% - 7.8%	6.7%

WACC

SGR.UN.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	1.18	1.42

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.20%	12.80%

Tax rate	17.20%	21.90%
Debt/Equity ratio	1.97	1.97
Cost of debt	4.70%	6.80%

After-tax WACC	5.7%	7.8%


Selected WACC	6.7%

SGR.UN.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 SGR.UN.TO:

cost_of_equity (11.00%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.18) + 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.