The WACC of Staffing 360 Solutions Inc (STAF) is 15.0%.
| Range | Selected | |
| Cost of equity | 15.20% - 22.10% | 18.65% |
| Tax rate | 1.60% - 3.10% | 2.35% |
| Cost of debt | 7.00% - 22.90% | 14.95% |
| WACC | 7.9% - 22.1% | 15.0% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 2.47 | 3.08 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 15.20% | 22.10% |
| Tax rate | 1.60% | 3.10% |
| Debt/Equity ratio | 6.97 | 6.97 |
| Cost of debt | 7.00% | 22.90% |
| After-tax WACC | 7.9% | 22.1% |
| Selected WACC | 15.0% | |
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 STAF:
cost_of_equity (18.65%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (2.47) + 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.