SNDL
Sundial Growers Inc
Price:  
1.39 
USD
Volume:  
2,522,804.00
Canada | Pharmaceuticals
Valuation
Overview
Financials
Forecast
Compare
Historical Price
SolvencyDividends
Transactions
People

SNDL WACC - Weighted Average Cost of Capital

The WACC of Sundial Growers Inc (SNDL) is 8.3%.

The Cost of Equity of Sundial Growers Inc (SNDL) is 9.40%.
The Cost of Debt of Sundial Growers Inc (SNDL) is 5.00%.

Range Selected
Cost of equity 7.80% - 11.00% 9.40%
Tax rate 1.20% - 2.50% 1.85%
Cost of debt 5.00% - 5.00% 5.00%
WACC 7.1% - 9.5% 8.3%
WACC

SNDL WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.85 1.09
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.80% 11.00%
Tax rate 1.20% 2.50%
Debt/Equity ratio 0.31 0.31
Cost of debt 5.00% 5.00%
After-tax WACC 7.1% 9.5%
Selected WACC 8.3%

SNDL'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 SNDL:

cost_of_equity (9.40%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.85) + 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.