SHLE.TO WACC - Weighted Average Cost of Capital
The WACC of Source Energy Services Ltd (SHLE.TO) is 9.3%.
| Range | Selected | |
| Cost of equity | 11.2% - 14.5% | 12.85% |
| Tax rate | 7.0% - 15.1% | 11.05% |
| Cost of debt | 6.3% - 9.4% | 7.85% |
| WACC | 8.1% - 10.6% | 9.3% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 1.59 | 1.69 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 11.2% | 14.5% |
| Tax rate | 7.0% | 15.1% |
| Debt/Equity ratio | 1.44 | 1.44 |
| Cost of debt | 6.3% | 9.4% |
| After-tax WACC | 8.1% | 10.6% |
| Selected WACC | 9.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| SHLE.TO | Source Energy Services Ltd | 1.44 | 2.42 | 1.07 |
| CWC.V | Cwc Energy Services Corp | 0.52 | 1.15 | 0.79 |
| ESN.TO | Essential Energy Services Ltd | 0.21 | 0.64 | 0.53 |
| HWO.TO | High Arctic Energy Services Inc | 0.42 | 1.29 | 0.94 |
| LNDT | Liandi Clean Technology Inc | 2613.16 | -0.17 | 0 |
| MCR.V | Macro Enterprises Inc | 0.4 | 1.54 | 1.14 |
| NES | Nuverra Environmental Solutions Inc | 0.99 | 1.59 | 0.85 |
| SND | Smart Sand Inc | 0.14 | 0.97 | 0.86 |
| TCW.TO | Trican Well Service Ltd | 0.02 | 1.1 | 1.08 |
| TTI | Tetra Technologies Inc | 0.39 | 1.51 | 1.12 |
| WEII.V | Wolverine Energy and Infrastructure Inc | 21.41 | 0.69 | 0.03 |
| Low | High | |
| Unlevered beta | 0.85 | 0.94 |
| Relevered beta | 1.88 | 2.03 |
| Adjusted relevered beta | 1.59 | 1.69 |
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 (12.85%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.59) + 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.