STC.TO
Sangoma Technologies Corp
Price:  
8.10 
CAD
Volume:  
2,850.00
Canada | Communications Equipment
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STC.TO WACC - Weighted Average Cost of Capital

The WACC of Sangoma Technologies Corp (STC.TO) is 7.6%.

The Cost of Equity of Sangoma Technologies Corp (STC.TO) is 8.65%.
The Cost of Debt of Sangoma Technologies Corp (STC.TO) is 5.00%.

Range Selected
Cost of equity 6.90% - 10.40% 8.65%
Tax rate 9.00% - 14.90% 11.95%
Cost of debt 5.00% - 5.00% 5.00%
WACC 6.3% - 8.9% 7.6%
WACC

STC.TO WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.73 1.03
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.90% 10.40%
Tax rate 9.00% 14.90%
Debt/Equity ratio 0.33 0.33
Cost of debt 5.00% 5.00%
After-tax WACC 6.3% 8.9%
Selected WACC 7.6%

STC.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 STC.TO:

cost_of_equity (8.65%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.73) + 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.