SSL.TO WACC - Weighted Average Cost of Capital

The WACC of Sandstorm Gold Ltd (SSL.TO) is 14.0%.

The Cost of Equity of Sandstorm Gold Ltd (SSL.TO) is 9.35%.

The Cost of Debt of Sandstorm Gold Ltd (SSL.TO) is 83.20%.

	Range	Selected
Cost of equity	7.90% - 10.80%	9.35%
Tax rate	27.20% - 40.30%	33.75%
Cost of debt	6.30% - 160.10%	83.20%
WACC	7.5% - 20.4%	14.0%

WACC

SSL.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.92	1.09

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.90%	10.80%

Tax rate	27.20%	40.30%
Debt/Equity ratio	0.13	0.13
Cost of debt	6.30%	160.10%

After-tax WACC	7.5%	20.4%


Selected WACC	14.0%

SSL.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 SSL.TO:

cost_of_equity (9.35%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.92) + 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.