SPB.TO
Superior Plus Corp
Price:  
8.07 
CAD
Volume:  
543,466.00
Canada | Gas Utilities
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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 7.20%.
The Cost of Debt of Superior Plus Corp (SPB.TO) is 5.85%.

Range Selected
Cost of equity 6.10% - 8.30% 7.20%
Tax rate 30.60% - 38.90% 34.75%
Cost of debt 4.90% - 6.80% 5.85%
WACC 4.7% - 6.2% 5.5%
WACC

SPB.TO WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.57 0.67
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.10% 8.30%
Tax rate 30.60% 38.90%
Debt/Equity ratio 1 1
Cost of debt 4.90% 6.80%
After-tax WACC 4.7% 6.2%
Selected WACC 5.5%

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.