SMP.V WACC - Weighted Average Cost of Capital
The WACC of Southern Empire Resources Corp (SMP.V) is 4.9%.
| Range | Selected | |
| Cost of equity | 4.6% - 7.8% | 6.2% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 4.1% - 5.7% | 4.9% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.14 | 0.48 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 4.6% | 7.8% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 4.1% | 5.7% |
| Selected WACC | 4.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| SMP.V | Southern Empire Resources Corp | 1.1 | -2.61 | -1.45 |
| HIH.V | Hylands International Holdings Inc | 0.03 | 1.64 | 1.61 |
| IRNS | Ironstone Group Inc | 578.62 | -0.19 | 0 |
| LBI.V | Lions Bay Capital Inc | 0.1 | -1 | -0.93 |
| LITT.V | Roadman Investments Corp | 0.06 | 0.57 | 0.55 |
| LSMG | Lode-Star Mining Inc | 0.04 | -1.07 | -1.04 |
| MILC | Millennium Investment & Acquisition Company Inc | 0.98 | 0.32 | 0.19 |
| MRBL.CN | Marble Financial Inc | 0.64 | -0.56 | -0.38 |
| PPK.V | Prospect Park Capital Corp | 0.02 | 2 | 1.97 |
| SRSG | Spirits Time International Inc | 1.32 | 0.33 | 0.17 |
| Low | High | |
| Unlevered beta | -0.15 | 0.18 |
| Relevered beta | -0.28 | 0.22 |
| Adjusted relevered beta | 0.14 | 0.48 |
SMP.V'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 SMP.V:
cost_of_equity (6.20%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (0.14) + 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.