AMPY
Amplify Energy Corp
Price:  
2.76 
USD
Volume:  
1,025,573.00
United States | Oil, Gas & Consumable Fuels
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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.