SQ.BK WACC - Weighted Average Cost of Capital

The WACC of Sahakol Equipment PCL (SQ.BK) is 14.7%.

The Cost of Equity of Sahakol Equipment PCL (SQ.BK) is 33.65%.

The Cost of Debt of Sahakol Equipment PCL (SQ.BK) is 13.30%.

	Range	Selected
Cost of equity	24.60% - 42.70%	33.65%
Tax rate	3.30% - 11.10%	7.20%
Cost of debt	4.00% - 22.60%	13.30%
WACC	6.5% - 23.0%	14.7%

WACC

SQ.BK WACC calculation

Category	Low	High

Long-term bond rate	2.6%	3.1%
Equity market risk premium	7.4%	8.4%
Adjusted beta	2.96	4.64

Additional risk adjustments	0.0%	0.5%
Cost of equity	24.60%	42.70%

Tax rate	3.30%	11.10%
Debt/Equity ratio	6.81	6.81
Cost of debt	4.00%	22.60%

After-tax WACC	6.5%	23.0%


Selected WACC	14.7%

SQ.BK'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 SQ.BK:

cost_of_equity (33.65%) = risk_free_rate (2.85%) + equity_risk_premium (7.90%) * adjusted_beta (2.96) + 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.