STLC.TO
Stelco Holdings Inc
Price:  
68.14 
CAD
Volume:  
40,928.00
Canada | Metals & Mining
Valuation
Overview
Financials
Forecast
Compare
Historical Price
SolvencyDividends
Transactions
People

STLC.TO WACC - Weighted Average Cost of Capital

The WACC of Stelco Holdings Inc (STLC.TO) is 7.8%.

The Cost of Equity of Stelco Holdings Inc (STLC.TO) is 7.95%.
The Cost of Debt of Stelco Holdings Inc (STLC.TO) is 7.70%.

Range Selected
Cost of equity 6.80% - 9.10% 7.95%
Tax rate 5.80% - 14.20% 10.00%
Cost of debt 4.20% - 11.20% 7.70%
WACC 6.5% - 9.1% 7.8%
WACC

STLC.TO WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.72 0.8
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.80% 9.10%
Tax rate 5.80% 14.20%
Debt/Equity ratio 0.14 0.14
Cost of debt 4.20% 11.20%
After-tax WACC 6.5% 9.1%
Selected WACC 7.8%

STLC.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 STLC.TO:

cost_of_equity (7.95%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.72) + 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.