SHC
Sotera Health Co
Price:  
16.37 
USD
Volume:  
1,031,549.00
United States | Life Sciences Tools & Services
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SHC WACC - Weighted Average Cost of Capital

The WACC of Sotera Health Co (SHC) is 8.2%.

The Cost of Equity of Sotera Health Co (SHC) is 9.80%.
The Cost of Debt of Sotera Health Co (SHC) is 7.55%.

Range Selected
Cost of equity 8.60% - 11.00% 9.80%
Tax rate 21.60% - 40.60% 31.10%
Cost of debt 6.00% - 9.10% 7.55%
WACC 7.3% - 9.1% 8.2%
WACC

SHC WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.03 1.09
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.60% 11.00%
Tax rate 21.60% 40.60%
Debt/Equity ratio 0.5 0.5
Cost of debt 6.00% 9.10%
After-tax WACC 7.3% 9.1%
Selected WACC 8.2%

SHC'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 SHC:

cost_of_equity (9.80%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.03) + 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.