SOLR.V WACC - Weighted Average Cost of Capital
The WACC of Solar Alliance Energy Inc (SOLR.V) is 6.3%.
| Range | Selected | |
| Cost of equity | 5.6% - 7.3% | 6.45% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.5% - 7.2% | 6.3% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.33 | 0.4 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.6% | 7.3% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 0.04 | 0.04 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.5% | 7.2% |
| Selected WACC | 6.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| SOLR.V | Solar Alliance Energy Inc | 0.04 | 0.91 | 0.88 |
| KNR.CN | Kontrol Technologies Corp | 0.07 | 1.11 | 1.06 |
| NKW.V | Oceanic Wind Energy Inc | 0 | -0.75 | -0.74 |
| NOVA | Sunnova Energy International Inc | 312.71 | 1.67 | 0.01 |
| PSPW | 3Power Energy Group Inc | 6.1 | -1.08 | -0.2 |
| PSWW | Principal Solar Inc | 33.55 | 0.85 | 0.03 |
| PWCO | PwrCor Inc | 0.02 | -1.41 | -1.38 |
| RE.V | RE Royalties Ltd | 1.8 | 0.47 | 0.2 |
| 01C.WA | 01Cyberaton SA | 0.21 | 0.66 | 0.57 |
| IB.MI | Iniziative Bresciane Inbre SpA | 1.49 | 0.01 | 0.01 |
| Low | High | |
| Unlevered beta | 0.01 | 0.1 |
| Relevered beta | 0 | 0.1 |
| Adjusted relevered beta | 0.33 | 0.4 |
SOLR.V'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 SOLR.V:
cost_of_equity (6.45%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (0.33) + 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.