SHC WACC - Weighted Average Cost of Capital

The WACC of Sotera Health Co (SHC) is 10.1%.

The Cost of Equity of Sotera Health Co (SHC) is 11.05%.

The Cost of Debt of Sotera Health Co (SHC) is 13.45%.

	Range	Selected
Cost of equity	9.00% - 13.10%	11.05%
Tax rate	21.60% - 40.60%	31.10%
Cost of debt	6.00% - 20.90%	13.45%
WACC	7.3% - 12.8%	10.1%

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	1.12	1.48

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.00%	13.10%

Tax rate	21.60%	40.60%
Debt/Equity ratio	0.66	0.66
Cost of debt	6.00%	20.90%

After-tax WACC	7.3%	12.8%


Selected WACC	10.1%

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 (11.05%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.12) + 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.