SND WACC - Weighted Average Cost of Capital
The WACC of Smart Sand Inc (SND) is 6.4%.
| Range | Selected | |
| Cost of equity | 5.5% - 7.8% | 6.65% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 6.1% - 6.3% | 6.2% |
| WACC | 5.3% - 7.4% | 6.4% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.35 | 0.53 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.5% | 7.8% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 0.14 | 0.14 |
| Cost of debt | 6.1% | 6.3% |
| After-tax WACC | 5.3% | 7.4% |
| Selected WACC | 6.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| SND | Smart Sand Inc | 0.14 | 1.2 | 1.09 |
| CPS.V | Canadian Premium Sand Inc | 0.18 | -0.3 | -0.26 |
| ENSV | Enservco Corp | 8.09 | -0.51 | -0.07 |
| ESN.TO | Essential Energy Services Ltd | 0.21 | 0.64 | 0.55 |
| HWO.TO | High Arctic Energy Services Inc | 0.45 | 1.04 | 0.79 |
| LNDT | Liandi Clean Technology Inc | 2613.16 | -0.42 | 0 |
| LRDC | Laredo Oil Inc | 0.14 | 0.1 | 0.09 |
| NES | Nuverra Environmental Solutions Inc | 0.99 | 1.59 | 0.92 |
| SYNE | Synthesis Energy Systems Inc | 36930.38 | 1.35 | 0 |
| WEII.V | Wolverine Energy and Infrastructure Inc | 21.41 | 0.69 | 0.04 |
| Low | High | |
| Unlevered beta | 0.02 | 0.27 |
| Relevered beta | 0.03 | 0.3 |
| Adjusted relevered beta | 0.35 | 0.53 |
SND'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 SND:
cost_of_equity (6.65%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.35) + 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.