STCM.TA WACC - Weighted Average Cost of Capital

The WACC of Satcom Systems Ltd (STCM.TA) is 7.1%.

The Cost of Equity of Satcom Systems Ltd (STCM.TA) is 10.80%.

The Cost of Debt of Satcom Systems Ltd (STCM.TA) is 10.70%.

	Range	Selected
Cost of equity	8.80% - 12.80%	10.80%
Tax rate	43.90% - 48.80%	46.35%
Cost of debt	8.40% - 13.00%	10.70%
WACC	5.9% - 8.4%	7.1%

WACC

STCM.TA WACC calculation

Category	Low	High

Long-term bond rate	3.0%	3.5%
Equity market risk premium	5.4%	6.4%
Adjusted beta	1.07	1.36

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.80%	12.80%

Tax rate	43.90%	48.80%
Debt/Equity ratio	2.47	2.47
Cost of debt	8.40%	13.00%

After-tax WACC	5.9%	8.4%


Selected WACC	7.1%

STCM.TA'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 STCM.TA:

cost_of_equity (10.80%) = risk_free_rate (3.25%) + equity_risk_premium (5.90%) * adjusted_beta (1.07) + 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.