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South Bow Corporation (SOBO) — WACC Analysis

WACC Breakdown

South Bow Corporation (SOBO) has a weighted average cost of capital (WACC) of 5.9%. The cost of equity is 6.9%, derived from a beta of 0.30 and a risk-free rate of 4.7%. The after-tax cost of debt is 4.5%. The capital structure is 57.2% equity and 42.8% debt.

Interpretation

A WACC of 5.9% suggests that the market views South Bow Corporation as relatively low-risk, with a lower cost of financing.

Investors can compare SOBO's WACC of 5.9% against industry peers to gauge its relative financing costs. A beta of 0.30 reflects the stock's volatility relative to the broader market.

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VALUATION

SOBO WACC: 5.89% for South Bow Corporation

Current inputs imply a 6.93% cost of equity and a 5.70% pre-tax cost of debt. Use this discount rate as a starting point for DCF validation.

[01]Current Market Data
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WACC Calculation Process
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Market Data Loaded
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Company Data Fetched
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Beta Calculated (5Y)
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Inputs Auto-Populated
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WACC Calculated
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Step 2: Enter Ticker Symbol
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Step 4: Review Auto-Populated WACC Inputs

Values are automatically populated from real data. You can adjust them manually if needed.

4.30%
1.000
4.23%
5.00%
21.00%
70.00%
Debt: 30.00%Equity: 70.00%

Please enter a valid company ticker to calculate WACC

South Bow Corporation Common Stock (SOBO) WACC Results
Weighted Average Cost of Capital
5.89%
Cost of Equity
6.93%
Risk-Free Rate4.67%
Beta0.30
Market Risk Premium4.23%
Cost of Debt
4.50%
Pre-Tax Cost of Debt5.70%
Tax Rate21.00%
Tax Shield1.20%
Capital Structure
Equity: 57.24%($7776.17M)
Debt: 42.76%($5808.00M)
Equity Component
3.96%
57.24% × 6.93%
Debt Component
1.92%
42.76% × 4.50%

South Bow Corporation (SOBO) WACC in context

South Bow Corporation (SOBO) currently screens with an estimated WACC of 5.89%. That blends a 6.93% cost of equity, a 5.70% pre-tax cost of debt, and a 57.24% equity weight into the discount rate you would typically use in a DCF model.

screens as a relatively low discount rate, which usually supports higher DCF values.

What SOBO WACC implies

A 5.89% discount rate screens as a relatively low discount rate, which usually supports higher DCF values.

How this page calculates SOBO

This page combines CAPM-based cost of equity with SEC-derived debt and capital structure inputs. The current beta is 0.30 and equity accounts for 57.24% of capital.

What to do next

Validate business quality on the company page, then carry the same discount-rate assumptions into the DCF page to test fair value sensitivity.

Disclaimer: This is not financial advice. Data sourced from SEC EDGAR and Polygon.io. Past performance does not guarantee future results. Always conduct your own research before making investment decisions.