SND WACC - Weighted Average Cost of Capital
The WACC of Smart Sand Inc (SND) is 6.7%.
| Range | Selected | |
| Cost of equity | 5.6% - 8.3% | 6.95% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 6.3% - 7.0% | 6.65% |
| WACC | 5.5% - 7.9% | 6.7% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.37 | 0.62 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.6% | 8.3% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 0.16 | 0.16 |
| Cost of debt | 6.3% | 7.0% |
| After-tax WACC | 5.5% | 7.9% |
| Selected WACC | 6.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| SND | Smart Sand Inc | 0.16 | 1 | 0.89 |
| ENGT | Energy and Technology Corp | 0.33 | -0.39 | -0.32 |
| ENSV | Enservco Corp | 11.56 | -0.9 | -0.09 |
| ESN.TO | Essential Energy Services Ltd | 0.21 | 0.64 | 0.55 |
| HWO.TO | High Arctic Energy Services Inc | 0.48 | 0.98 | 0.72 |
| LNDT | Liandi Clean Technology Inc | 2613.16 | -0.19 | 0 |
| LRDC | Laredo Oil Inc | 0.16 | 0.08 | 0.07 |
| NES | Nuverra Environmental Solutions Inc | 0.99 | 1.59 | 0.92 |
| TUSK | Mammoth Energy Services Inc | 0.1 | 0.31 | 0.28 |
| WEII.V | Wolverine Energy and Infrastructure Inc | 21.41 | 0.69 | 0.04 |
| Low | High | |
| Unlevered beta | 0.06 | 0.39 |
| Relevered beta | 0.06 | 0.43 |
| Adjusted relevered beta | 0.37 | 0.62 |
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 (6.95%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.37) + 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.