BNE.TO WACC - Weighted Average Cost of Capital

The WACC of Bonterra Energy Corp (BNE.TO) is 8.1%.

The Cost of Equity of Bonterra Energy Corp (BNE.TO) is 5.90%.

The Cost of Debt of Bonterra Energy Corp (BNE.TO) is 15.55%.

	Range	Selected
Cost of equity	4.60% - 7.20%	5.90%
Tax rate	23.80% - 24.40%	24.10%
Cost of debt	7.90% - 23.20%	15.55%
WACC	5.1% - 11.1%	8.1%

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	-0.12	0.17

Additional risk adjustments	2.0%	2.5%
Cost of equity	4.60%	7.20%

Tax rate	23.80%	24.40%
Debt/Equity ratio	0.61	0.61
Cost of debt	7.90%	23.20%

After-tax WACC	5.1%	11.1%


Selected WACC	8.1%

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 (5.90%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (-0.12) + risk_adjustments (2.25%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.