The WACC of Sire Bioscience Inc (SIRE.CN) is 6.8%.
| Range | Selected | |
| Cost of equity | 5.30% - 8.90% | 7.10% |
| Tax rate | 26.50% - 26.50% | 26.50% |
| Cost of debt | 5.00% - 5.00% | 5.00% |
| WACC | 5.2% - 8.5% | 6.8% |
| Category | Low | High |
| Long-term bond rate | 3.4% | 3.9% |
| Equity market risk premium | 4.7% | 5.7% |
| Adjusted beta | 0.31 | 0.71 |
| Additional risk adjustments | 0.5% | 1.0% |
| Cost of equity | 5.30% | 8.90% |
| Tax rate | 26.50% | 26.50% |
| Debt/Equity ratio | 0.09 | 0.09 |
| Cost of debt | 5.00% | 5.00% |
| After-tax WACC | 5.2% | 8.5% |
| Selected WACC | 6.8% | |
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 SIRE.CN:
cost_of_equity (7.10%) = risk_free_rate (3.65%) + equity_risk_premium (5.20%) * adjusted_beta (0.31) + risk_adjustments (0.75%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.