BNE.TO
Bonterra Energy Corp
Price:  
3.52 
CAD
Volume:  
12,900
Canada | Oil, Gas & Consumable Fuels

BNE.TO WACC - Weighted Average Cost of Capital

The WACC of Bonterra Energy Corp (BNE.TO) is 8.9%.

The Cost of Equity of Bonterra Energy Corp (BNE.TO) is 12.25%.
The Cost of Debt of Bonterra Energy Corp (BNE.TO) is 8.15%.

RangeSelected
Cost of equity10.8% - 13.7%12.25%
Tax rate23.8% - 24.4%24.1%
Cost of debt6.8% - 9.5%8.15%
WACC7.7% - 10.1%8.9%
WACC

BNE.TO WACC calculation

CategoryLowHigh
Long-term bond rate3.2%3.7%
Equity market risk premium5.1%6.1%
Adjusted beta1.51.56
Additional risk adjustments0.0%0.5%
Cost of equity10.8%13.7%
Tax rate23.8%24.4%
Debt/Equity ratio
1.21.2
Cost of debt6.8%9.5%
After-tax WACC7.7%10.1%
Selected WACC8.9%

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 (12.25%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.5) + 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.