SWP.TO WACC - Weighted Average Cost of Capital

The WACC of Swiss Water Decaffeinated Coffee Inc (SWP.TO) is 4.2%.

The Cost of Equity of Swiss Water Decaffeinated Coffee Inc (SWP.TO) is 6.40%.

The Cost of Debt of Swiss Water Decaffeinated Coffee Inc (SWP.TO) is 4.85%.

	Range	Selected
Cost of equity	4.80% - 8.00%	6.40%
Tax rate	25.10% - 33.20%	29.15%
Cost of debt	4.30% - 5.40%	4.85%
WACC	3.7% - 4.8%	4.2%

WACC

SWP.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.33	0.63

Additional risk adjustments	0.0%	0.5%
Cost of equity	4.80%	8.00%

Tax rate	25.10%	33.20%
Debt/Equity ratio	2.64	2.64
Cost of debt	4.30%	5.40%

After-tax WACC	3.7%	4.8%


Selected WACC	4.2%

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 (6.40%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.33) + 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.