SPB.TO WACC - Weighted Average Cost of Capital

The WACC of Superior Plus Corp (SPB.TO) is 5.0%.

The Cost of Equity of Superior Plus Corp (SPB.TO) is 6.45%.

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

	Range	Selected
Cost of equity	5.60% - 7.30%	6.45%
Tax rate	30.60% - 38.90%	34.75%
Cost of debt	4.90% - 6.80%	5.85%
WACC	4.4% - 5.6%	5.0%

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	0.48	0.52

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.60%	7.30%

Tax rate	30.60%	38.90%
Debt/Equity ratio	1.18	1.18
Cost of debt	4.90%	6.80%

After-tax WACC	4.4%	5.6%


Selected WACC	5.0%

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 (6.45%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.48) + 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.