BNE.TO WACC - Weighted Average Cost of Capital

The WACC of Bonterra Energy Corp (BNE.TO) is 10.8%.

The Cost of Equity of Bonterra Energy Corp (BNE.TO) is 10.40%.

The Cost of Debt of Bonterra Energy Corp (BNE.TO) is 14.85%.

	Range	Selected
Cost of equity	8.30% - 12.50%	10.40%
Tax rate	23.80% - 24.40%	24.10%
Cost of debt	9.50% - 20.20%	14.85%
WACC	7.7% - 13.9%	10.8%

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	1.37

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.30%	12.50%

Tax rate	23.80%	24.40%
Debt/Equity ratio	1	1
Cost of debt	9.50%	20.20%

After-tax WACC	7.7%	13.9%


Selected WACC	10.8%

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 (10.40%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1) + 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.