BNE.TO WACC - Weighted Average Cost of Capital

The WACC of Bonterra Energy Corp (BNE.TO) is 9.4%.

The Cost of Equity of Bonterra Energy Corp (BNE.TO) is 12.95%.

The Cost of Debt of Bonterra Energy Corp (BNE.TO) is 8.95%.

	Range	Selected
Cost of equity	11.20% - 14.70%	12.95%
Tax rate	23.80% - 24.40%	24.10%
Cost of debt	8.40% - 9.50%	8.95%
WACC	8.5% - 10.4%	9.4%

WACC

BNE.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	1.58	1.73

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.20%	14.70%

Tax rate	23.80%	24.40%
Debt/Equity ratio	1.33	1.33
Cost of debt	8.40%	9.50%

After-tax WACC	8.5%	10.4%


Selected WACC	9.4%

BNE.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 BNE.TO:

cost_of_equity (12.95%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.58) + 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.