SIA.TO WACC - Weighted Average Cost of Capital
The WACC of Sienna Senior Living Inc (SIA.TO) is 6.3%.
| Range | Selected | |
| Cost of equity | 6.0% - 8.8% | 7.4% |
| Tax rate | 27.0% - 28.0% | 27.5% |
| Cost of debt | 4.0% - 8.4% | 6.2% |
| WACC | 4.8% - 7.7% | 6.3% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.55 | 0.76 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.0% | 8.8% |
| Tax rate | 27.0% | 28.0% |
| Debt/Equity ratio | 0.61 | 0.61 |
| Cost of debt | 4.0% | 8.4% |
| After-tax WACC | 4.8% | 7.7% |
| Selected WACC | 6.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| SIA.TO | Sienna Senior Living Inc | 0.61 | 0.31 | 0.21 |
| DR.TO | Medical Facilities Corp | 0.51 | 0.33 | 0.24 |
| DVCR | Diversicare Healthcare Services Inc | 0.86 | 0.9 | 0.55 |
| EXE.TO | Extendicare Inc | 0.24 | 0.43 | 0.37 |
| GRST | Ethema Health Corp | 1.67 | 0.11 | 0.05 |
| HNGR | Hanger Inc | 0.71 | 1.32 | 0.87 |
| IMAC | IMAC Holdings Inc | 0.01 | -1 | -0.99 |
| NFH | New Frontier Health Corp | 0.19 | 0.14 | 0.12 |
| NHC | National Healthcare Corp | 0.09 | 0.64 | 0.6 |
| USPH | U.S. Physical Therapy Inc | 0.14 | 0.89 | 0.81 |
| Low | High | |
| Unlevered beta | 0.23 | 0.44 |
| Relevered beta | 0.33 | 0.64 |
| Adjusted relevered beta | 0.55 | 0.76 |
SIA.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 SIA.TO:
cost_of_equity (7.40%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.55) + 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.