SNC.TO WACC - Weighted Average Cost of Capital

The WACC of SNC-Lavalin Group Inc (SNC.TO) is 8.3%.

The Cost of Equity of SNC-Lavalin Group Inc (SNC.TO) is 10.20%.

The Cost of Debt of SNC-Lavalin Group Inc (SNC.TO) is 7.15%.

	Range	Selected
Cost of equity	8.80% - 11.60%	10.20%
Tax rate	24.00% - 47.80%	35.90%
Cost of debt	4.70% - 9.60%	7.15%
WACC	7.1% - 9.5%	8.3%

WACC

SNC.TO WACC calculation

Category	Low	High

Long-term bond rate	3.6%	4.1%
Equity market risk premium	5.5%	6.5%
Adjusted beta	0.95	1.09

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.80%	11.60%

Tax rate	24.00%	47.80%
Debt/Equity ratio	0.47	0.47
Cost of debt	4.70%	9.60%

After-tax WACC	7.1%	9.5%


Selected WACC	8.3%

SNC.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 SNC.TO:

cost_of_equity (10.20%) = risk_free_rate (3.85%) + equity_risk_premium (6.00%) * adjusted_beta (0.95) + 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.