BNE.TO
Bonterra Energy Corp
Price:  
3.49 
CAD
Volume:  
12,900.00
Canada | Oil, Gas & Consumable Fuels
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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 12.05%.
The Cost of Debt of Bonterra Energy Corp (BNE.TO) is 8.15%.

Range Selected
Cost of equity 10.60% - 13.50% 12.05%
Tax rate 23.80% - 24.40% 24.10%
Cost of debt 6.80% - 9.50% 8.15%
WACC 7.6% - 10.1% 8.9%
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 1.45 1.53
Additional risk adjustments 0.0% 0.5%
Cost of equity 10.60% 13.50%
Tax rate 23.80% 24.40%
Debt/Equity ratio 1.18 1.18
Cost of debt 6.80% 9.50%
After-tax WACC 7.6% 10.1%
Selected WACC 8.9%

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 (12.05%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.45) + 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.