SUGR.V WACC - Weighted Average Cost of Capital

The WACC of SugarBud Craft Growers Corp (SUGR.V) is 7.5%.

The Cost of Equity of SugarBud Craft Growers Corp (SUGR.V) is 13.35%.

The Cost of Debt of SugarBud Craft Growers Corp (SUGR.V) is 7.40%.

	Range	Selected
Cost of equity	8.40% - 18.30%	13.35%
Tax rate	20.30% - 23.90%	22.10%
Cost of debt	7.30% - 7.50%	7.40%
WACC	6.5% - 8.6%	7.5%

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	0.89	2.2

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.40%	18.30%

Tax rate	20.30%	23.90%
Debt/Equity ratio	3.27	3.27
Cost of debt	7.30%	7.50%

After-tax WACC	6.5%	8.6%


Selected WACC	7.5%

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 (13.35%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (0.89) + 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.