AMPY WACC - Weighted Average Cost of Capital

The WACC of Amplify Energy Corp (AMPY) is 9.6%.

The Cost of Equity of Amplify Energy Corp (AMPY) is 13.50%.

The Cost of Debt of Amplify Energy Corp (AMPY) is 6.50%.

	Range	Selected
Cost of equity	10.50% - 16.50%	13.50%
Tax rate	0.10% - 6.40%	3.25%
Cost of debt	6.00% - 7.00%	6.50%
WACC	8.1% - 11.1%	9.6%

WACC

AMPY WACC calculation

Category	Low	High

Long-term bond rate	3.9%	4.4%
Equity market risk premium	4.6%	5.6%
Adjusted beta	1.43	2.08

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.50%	16.50%

Tax rate	0.10%	6.40%
Debt/Equity ratio	1.17	1.17
Cost of debt	6.00%	7.00%

After-tax WACC	8.1%	11.1%


Selected WACC	9.6%

AMPY'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 AMPY:

cost_of_equity (13.50%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.43) + 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.