SRI.V
Sparton Resources Inc
Price:  
0.02 
CAD
Volume:  
24,352.00
Canada | Oil, Gas & Consumable Fuels
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SRI.V WACC - Weighted Average Cost of Capital

The WACC of Sparton Resources Inc (SRI.V) is 7.0%.

The Cost of Equity of Sparton Resources Inc (SRI.V) is 7.15%.
The Cost of Debt of Sparton Resources Inc (SRI.V) is 5.00%.

Range Selected
Cost of equity 5.40% - 8.90% 7.15%
Tax rate 0.40% - 2.90% 1.65%
Cost of debt 5.00% - 5.00% 5.00%
WACC 5.4% - 8.6% 7.0%
WACC

SRI.V WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.3 0.65
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.40% 8.90%
Tax rate 0.40% 2.90%
Debt/Equity ratio 0.07 0.07
Cost of debt 5.00% 5.00%
After-tax WACC 5.4% 8.6%
Selected WACC 7.0%

SRI.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 SRI.V:

cost_of_equity (7.15%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (0.3) + 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.