SPB.TO
Superior Plus Corp
Price:  
8.06 
CAD
Volume:  
543,466
Canada | Gas Utilities

SPB.TO WACC - Weighted Average Cost of Capital

The WACC of Superior Plus Corp (SPB.TO) is 5.5%.

The Cost of Equity of Superior Plus Corp (SPB.TO) is 7.2%.
The Cost of Debt of Superior Plus Corp (SPB.TO) is 5.85%.

RangeSelected
Cost of equity6.1% - 8.3%7.2%
Tax rate30.6% - 38.9%34.75%
Cost of debt4.9% - 6.8%5.85%
WACC4.7% - 6.2%5.5%
WACC

SPB.TO WACC calculation

CategoryLowHigh
Long-term bond rate3.2%3.7%
Equity market risk premium5.1%6.1%
Adjusted beta0.570.67
Additional risk adjustments0.0%0.5%
Cost of equity6.1%8.3%
Tax rate30.6%38.9%
Debt/Equity ratio
1.011.01
Cost of debt4.9%6.8%
After-tax WACC4.7%6.2%
Selected WACC5.5%

SPB.TO'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 SPB.TO:

cost_of_equity (7.20%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.57) + 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.