ARWD WACC - Weighted Average Cost of Capital
The WACC of Arrow Resources Development Inc (ARWD) is 4.3%.
| Range | Selected | |
| Cost of equity | 4.4% - 4008.0% | 2006.2% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 3.7% - 5.0% | 4.3% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.12 | 714.85 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 4.4% | 4008.0% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 3073.43 | 3073.43 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 3.7% | 5.0% |
| Selected WACC | 4.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| ARWD | Arrow Resources Development Inc | 3073.43 | -0.78 | 0 |
| APGI | American Power Group Corp | 0.43 | -0.51 | -0.38 |
| CCTC | Clean Coal Technologies Inc | 0.99 | 1.48 | 0.86 |
| ETK.H.V | Envirotek Remediation Inc | 0.22 | 1.09 | 0.94 |
| EVSV | Enviro-Serv Inc | 12.98 | 1.75 | 0.17 |
| GEVI | General Environmental Management Inc | 0.01 | 0.96 | 0.95 |
| NNRI | NNRF Inc | 0.05 | 1.39 | 1.34 |
| NUGL | NUGL Inc | 0.02 | -0.8 | -0.79 |
| TEXC | Texcom Inc | 22.58 | -1.66 | -0.1 |
| Low | High | |
| Unlevered beta | 0.03 | 0.72 |
| Relevered beta | -0.31 | 1066.45 |
| Adjusted relevered beta | 0.12 | 714.85 |
ARWD'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 ARWD:
cost_of_equity (2,006.20%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.12) + 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.