SHLE.TO WACC - Weighted Average Cost of Capital

The WACC of Source Energy Services Ltd (SHLE.TO) is 9.4%.

The Cost of Equity of Source Energy Services Ltd (SHLE.TO) is 13.30%.

The Cost of Debt of Source Energy Services Ltd (SHLE.TO) is 7.85%.

	Range	Selected
Cost of equity	11.50% - 15.10%	13.30%
Tax rate	7.00% - 15.10%	11.05%
Cost of debt	6.30% - 9.40%	7.85%
WACC	8.1% - 10.8%	9.4%

WACC

SHLE.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	1.63	1.8

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.50%	15.10%

Tax rate	7.00%	15.10%
Debt/Equity ratio	1.53	1.53
Cost of debt	6.30%	9.40%

After-tax WACC	8.1%	10.8%


Selected WACC	9.4%

SHLE.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 SHLE.TO:

cost_of_equity (13.30%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.63) + 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.