SIGO WACC - Weighted Average Cost of Capital
The WACC of Sunset Island Group Inc (SIGO) is 4.9%.
| Range | Selected | |
| Cost of equity | 5.4% - 7.1% | 6.25% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 4.5% - 5.4% | 4.9% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.33 | 0.39 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.4% | 7.1% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 4.5% | 5.4% |
| Selected WACC | 4.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| SIGO | Sunset Island Group Inc | 198303.33 | 209.76 | 0 |
| ACCA | Acacia Diversified Holdings Inc | 22199.52 | -0.93 | 0 |
| BSPK | Bespoke Extracts Inc | 0.7 | 1.28 | 0.85 |
| CHM.CN | Chemistree Technology Inc | 2.06 | -0.31 | -0.12 |
| GNOM.CN | Gnomestar Craft Inc | 2.36 | 1.84 | 0.68 |
| GSAC | Gelstat Corp | 1.42 | 0.27 | 0.13 |
| MDIN | Northstar Global Business Services Inc | 34.22 | 0 | 0 |
| POT.CN | Weekend Unlimited Industries Inc | 0.02 | 1.5 | 1.48 |
| SYUP | ANBC Inc | 34.91 | -0.15 | -0.01 |
| ULUR | ULURU Inc | 0.09 | 1.62 | 1.52 |
| Low | High | |
| Unlevered beta | 0 | 0.35 |
| Relevered beta | 0 | 0.09 |
| Adjusted relevered beta | 0.33 | 0.39 |
SIGO'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 SIGO:
cost_of_equity (6.25%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.33) + 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.