SUGR.V WACC - Weighted Average Cost of Capital

The WACC of SugarBud Craft Growers Corp (SUGR.V) is 8.2%.

The Cost of Equity of SugarBud Craft Growers Corp (SUGR.V) is 11.65%.

The Cost of Debt of SugarBud Craft Growers Corp (SUGR.V) is 6.45%.

	Range	Selected
Cost of equity	9.30% - 14.00%	11.65%
Tax rate	16.90% - 22.10%	19.50%
Cost of debt	5.60% - 7.30%	6.45%
WACC	6.8% - 9.5%	8.2%

WACC

SUGR.V WACC calculation

Category	Low	High

Long-term bond rate	3.9%	4.4%
Equity market risk premium	5.1%	6.1%
Adjusted beta	1.06	1.5

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.30%	14.00%

Tax rate	16.90%	22.10%
Debt/Equity ratio	1.17	1.17
Cost of debt	5.60%	7.30%

After-tax WACC	6.8%	9.5%


Selected WACC	8.2%

SUGR.V'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 SUGR.V:

cost_of_equity (11.65%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (1.06) + 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.