SJR.B.TO
Shaw Communications Inc
Price:  
40.48 
CAD
Volume:  
1,397,180.00
Canada | Media
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SJR.B.TO WACC - Weighted Average Cost of Capital

The WACC of Shaw Communications Inc (SJR.B.TO) is 5.7%.

The Cost of Equity of Shaw Communications Inc (SJR.B.TO) is 6.20%.
The Cost of Debt of Shaw Communications Inc (SJR.B.TO) is 4.80%.

Range Selected
Cost of equity 5.40% - 7.00% 6.20%
Tax rate 17.90% - 22.50% 20.20%
Cost of debt 4.40% - 5.20% 4.80%
WACC 5.0% - 6.4% 5.7%
WACC

SJR.B.TO WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.44 0.47
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.40% 7.00%
Tax rate 17.90% 22.50%
Debt/Equity ratio 0.29 0.29
Cost of debt 4.40% 5.20%
After-tax WACC 5.0% 6.4%
Selected WACC 5.7%

SJR.B.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 SJR.B.TO:

cost_of_equity (6.20%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.44) + 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.