SWP.TO
Swiss Water Decaffeinated Coffee Inc
Price:  
4.3 
CAD
Volume:  
4,400
Canada | Food Products

SWP.TO WACC - Weighted Average Cost of Capital

The WACC of Swiss Water Decaffeinated Coffee Inc (SWP.TO) is 5.5%.

The Cost of Equity of Swiss Water Decaffeinated Coffee Inc (SWP.TO) is 11.15%.
The Cost of Debt of Swiss Water Decaffeinated Coffee Inc (SWP.TO) is 5.8%.

RangeSelected
Cost of equity8.0% - 14.3%11.15%
Tax rate26.5% - 34.5%30.5%
Cost of debt4.8% - 6.8%5.8%
WACC4.5% - 6.5%5.5%
WACC

SWP.TO WACC calculation

CategoryLowHigh
Long-term bond rate3.2%3.7%
Equity market risk premium5.1%6.1%
Adjusted beta0.961.66
Additional risk adjustments0.0%0.5%
Cost of equity8.0%14.3%
Tax rate26.5%34.5%
Debt/Equity ratio
3.793.79
Cost of debt4.8%6.8%
After-tax WACC4.5%6.5%
Selected WACC5.5%

SWP.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 SWP.TO:

cost_of_equity (11.15%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.96) + 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.