ATH.TO WACC - Weighted Average Cost of Capital

The WACC of Athabasca Oil Corp (ATH.TO) is 7.6%.

The Cost of Equity of Athabasca Oil Corp (ATH.TO) is 7.80%.

The Cost of Debt of Athabasca Oil Corp (ATH.TO) is 7.60%.

	Range	Selected
Cost of equity	6.60% - 9.00%	7.80%
Tax rate	14.10% - 29.30%	21.70%
Cost of debt	4.00% - 11.20%	7.60%
WACC	6.4% - 8.9%	7.6%

WACC

ATH.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.67	0.79

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.60%	9.00%

Tax rate	14.10%	29.30%
Debt/Equity ratio	0.07	0.07
Cost of debt	4.00%	11.20%

After-tax WACC	6.4%	8.9%


Selected WACC	7.6%

ATH.TO'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 ATH.TO:

cost_of_equity (7.80%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.67) + 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.