SOL.WA WACC - Weighted Average Cost of Capital

The WACC of Solar Company SA (SOL.WA) is 92.8%.

The Cost of Equity of Solar Company SA (SOL.WA) is 9.25%.

The Cost of Debt of Solar Company SA (SOL.WA) is 136.30%.

	Range	Selected
Cost of equity	7.90% - 10.60%	9.25%
Tax rate	15.40% - 24.20%	19.80%
Cost of debt	7.00% - 265.60%	136.30%
WACC	6.2% - 179.5%	92.8%

WACC

SOL.WA WACC calculation

Category	Low	High

Long-term bond rate	5.5%	6.0%
Equity market risk premium	6.3%	7.3%
Adjusted beta	0.38	0.56

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.90%	10.60%

Tax rate	15.40%	24.20%
Debt/Equity ratio	7.7	7.7
Cost of debt	7.00%	265.60%

After-tax WACC	6.2%	179.5%


Selected WACC	92.8%

SOL.WA'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 SOL.WA:

cost_of_equity (9.25%) = risk_free_rate (5.75%) + equity_risk_premium (6.80%) * adjusted_beta (0.38) + 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.